Looking for Advice from Experienced Landlords

[Account Closed]

Hi all,

I am seeking information on how to set up bank accounts for rental properties.  I have opened a separate account for my first rental property, but I'm not sure if I should open up a second account to deposit the Cap Exp, Maintenance, and vacancies savings for that rental or what is the best way to do this.  

My fear is the money will get spent if it is all in one general account; I want to do this right so when surprises happen, I am financially prepared.  

Also, do you open different accounts for each rental property you buy, or do you deposit it all in one account?  I imagine the fees could eat you alive with multiple accounts, but being I am totally new at this, I'm not sure what is the best method.

Thank you for your time, knowledge and advice in advance.  I also welcome connection requests.

Lisa

[Josh Stack]

@Account Closed

Hi Lisa,

You may want to check out Profit First by Mike Michalowicz.  He lays out a system for managing the finances of your business that many find helpful.

I have not read the book myself but have implemented a derivative of his system for my rentals.  I have separate banking accounts for the major cost buckets of my rental business.  Each month after rents come in, I dump a predefined amount of money into each account.  This helps me keep track of things and gives me peace of mind to know that I have money set aside for costs as they come up.

I maintain the below account structure in my personal banking for the rentals I have in my personal name and also for the accounts of my LLC. All properties in the LLC go into one set of accounts outlined below. I have a spreadsheet to track how much I accrue/set aside each month based on the rents I expect to have coming in.

My banks let me have these accounts for free with some nominal minimum balance requirements.

I have separate accounts for:

Working Capital (main account, rents come in, mortgages go out)

Capex

Rep/Maint/Vacancy

Tax/Insurance

Cashflow

Tenant deposits (for self managed properties)

https://www.amazon.com/Profit-First-Transform-Cash...