House Hack Accounting Help

[Ben Pearce]

My wife and I will be house hacking with a duplex once we close at the end of January. I have some questions around paying the mortgage and also about the use of a business credit card. 

I currently understand the importance of keeping personal/business transactions separate. I will be opening a separate checking/savings account for the other side of the duplex to house rent income and property related expenses. One of my main questions with this then is what my best route is going to be to pay the mortgage. The total monthly payment will be pretty close to this: P&I - $1,295, Taxes - $420, Insurance - $175, PMI - $220, for a grand total of around $2,100/m. We expect to bring in $1,200/m in rent for the other half. If we only have $1200 coming into the rental account as income what is the best strategy for paying the mortgage? Setting up two separate payments (the $1200 coming from the rental account & the difference coming from our personal account)? Making one payment by transferring the difference into the rental account each month from our personal account? Or vice versa by transferring the $1200 to our personal account and paying that way??

Secondly I am questioning the use of a business credit card to charge expenses of the rental property. On top of having a separate checking/savings for each rental property (we intend to purchase more), I am curious as to how some of you more experienced investors scale with using a credit card for expenses? Would I open another card for each property like with checking/savings accounts? Or use the same card for all properties and reconcile expenses for each property at the end of the month and pay accordingly from each? 

Sorry for the long post, I have so many questions as a new investor. Any advice is appreciated, thanks!

[Bob Norton]

@Ben Pearce A house hack with a duplex is actually rather simple.  Any expenses for your property that is shared by both sides is split 50/50, such as insurance, mortgage interest, property taxes, or major repairs such as roof replacement (which has to be capitalized and depreciated).  Any expense that you spend specifically for the rental side, such a repairing the plumbing or replacing a light fixture, is expensed against the rental income.

How you pay the mortgage does not matter.  You can pay this from your personal account.  You can transfer the funds from your rental account to your personal account each month.

Having a separate checking account for your rental side is a good idea, so that you can easily track any expenses specifically for that side of the house and directly deductible from your rental income.

I setup a checking account for each property I own and use a debit card for the account for any specific purchases.  If I need to purchase something that exceeds the balance in the checking account, I either transfer funds from my personal account into it, or I charge the expense on my credit card.  If I use the credit card, I repay myself from future rents.