How and where to open an escrow account- GA Landlord

[Meghan Purkis]

Ill be helping my father-in-law manage a property he has near Hinesville GA.

Since I'll be charging a fee for helping him, from what I can tell he needs to put the security deposit in an escrow account.

I've seen A LOT of mixed answers. Claims that its just a checking account and noted escrow and so many other conflicting instructions.

Has anyone dealt with this? What bank, type of account, and does he open it in his name(he won't be starting a business for this single property).
Appreciate any and all feedback

[Carini Rochester]

Go to the bank where he does his checking. Open a savings account in the his name. Deposit the security deposit in the savings account. Don't use the savings account for anything else.

[Nathan Gesner]

Quote from @Meghan Purkis:

You need two accounts: checking and savings. If the properties are split into more than one LLC, then each LLC will need its own accounts.

Checking: collect all income here, then use it to pay bills. Pay the mortgage. Pay for maintenance. If you are setting aside funds for capex, taxes, insurance, or other expenses that don't occur monthly, transfer those funds to Savings each month and hold them there until it's time to spend them. You will receive the security deposit in Checking but then transfer it to Savings.

Savings: Hold the deposit here so it's separate from operating funds. You can also hold money for maintenance, capex, taxes, insurance, or other projected expenses. When a tenant moves out, transfer the deposit back to Checking so it's ready to apply towards expenses or to refund to the Tenant.

If you end up with excess funds in the Checking account, I recommend you transfer it to a third account that is specifically designated for future investments. That ensures you don't spend it on other things and that you know exactly how much you have available to spend on the next purchase. If it's mixed in with your deposits and reserve funds, you may accidentally spend money you shouldn't have.