Escrow Accounts for Rental Properties

[David Stafford]

Hi All,

I'm looking to purchase a number of smallish rental properties and I'm curious as to the general consensus (or rules, as it were) to the incoming rental checks -- do I open an escrow (or simple checking) account for each property or one account for all properties? I will open at least one to avoid commingling personal money with business money but I'm not sure where to go from there. Any help would be greatly appreciated. 

Thanks!

[Laura Richards]

A trust is just a piece of paper which means it cant open a checking account. Your trustee will need to be the named party to open the account on behalf of a trust. I don't allow clients to open up bank accounts in my name as Trustee. Rather, as the Trustee, I am the owner of the property on behalf of the trust so I just appoint my beneficiary as "property manager" for the trust. The property manager has its own banking accounts for handling escrow deposits vs. rent checks - you will need to be familiar with the rules on separating the two in your state.