Banking and Book Keeping for Rentals

[Alex Smith]

Hi guys!!!

We are about 2.5 years in on our buy and hold RE journey and currently under contract on units 5 & 6!!! When we bought our first 2 units (a duplex) I opened a checking account and 2 savings accounts for the property. The checking account for rent and expenses and then a savings account for each security deposit. We then bought another property with 2 single family homes on one property (units 3 & 4), so I repeated the same thing by opening a checking account and 2 savings accounts.

After experiencing a fire @ our duplex earlier this year, we have now made the place brand new, which means more rent and more equity. We are now using the equity to purchase another duplex (units 5 & 6) because it all still makes sense with our criteria and the numbers. Instead of doing a cash out refinance on the first duplex to fund the down payment on the second duplex, our lender is doing 1 mortgage to include both properties. So now it's got me thinking about banking and book keeping and staying organized. If my lender didn't bring up this idea of having 2 properties on one mortgage, I would have continued to do the same thing I had been doing, by opening up savings accounts for these units' security deposits and another operating account for the property. This now seems a little silly now that we are starting to acquire more properties and I'm looking to simplify.

How do you guys do it? If you have several units do you use one account for operating expenses for all of your units? Curious to hear and learn from those who have done what we are looking to do and by that I mean, continue to grow a buy & hold real estate portfolio that is definitely going to require some systems to be put into place. 

Thanks for your help in advance!

Alex