Author Topic: do you have a business account for your rental?  (Read 5250 times)

Guizmo

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do you have a business account for your rental?
« on: February 08, 2014, 10:23:55 AM »
Hello everyone,

I don't have an LLC on my rental condo. Currently, I use my personal banking accounts to do all my transactions for the condo. Should I be opening up a separate business account? Can I do that without having a company/LLC? Is it fine to use my personal accounts?

Thanks!

parkette

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Re: do you have a business account for your rental?
« Reply #1 on: February 08, 2014, 11:52:32 AM »
This is something I keep wondering as well!

arebelspy

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Re: do you have a business account for your rental?
« Reply #2 on: February 08, 2014, 12:49:42 PM »
I would do the transactions in a separate account, even if you don't have an LLC (and if you do, obviously have an account set up in that LLC's name).
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randymarsh

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Re: do you have a business account for your rental?
« Reply #3 on: February 08, 2014, 02:37:45 PM »
Definitely a separate account. Makes paper work much easier. And if you ever do go the LLC route, it strengthens the corporate veil.

FastStache

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Re: do you have a business account for your rental?
« Reply #4 on: February 08, 2014, 03:19:57 PM »
Is it better to operate rentals under an LLC? Any good websites with a side by side comparison?

Fireman

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Re: do you have a business account for your rental?
« Reply #5 on: February 08, 2014, 03:27:03 PM »
I have a separate (personal) checking account that I use for all income and expenditures for the rental.  Unfortunately, however, my credit union combines all my checking and savings accounts into one statement.  This was still the best approach for me when I became an accidental landlord.  If and when I refinance (waiting for LTV and other variables), I will separate the rental into a completely separate bank.

arebelspy

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Re: do you have a business account for your rental?
« Reply #6 on: February 08, 2014, 03:27:09 PM »
Is it better to operate rentals under an LLC? Any good websites with a side by side comparison?

Depends on who you ask, what their motivation is, what your situation is, the type of rental, etc. etc.

That's a very loaded question.

But you can do a search on these forums for a discussion of it, as well as the broader internet.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

monarda

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Re: do you have a business account for your rental?
« Reply #7 on: February 08, 2014, 03:31:23 PM »
Definitely a separate account. Makes paper work much easier. And if you ever do go the LLC route, it strengthens the corporate veil.

That's what we do. We have an account for our rentals, separate from our personal checking acct. We also have a CD in each tenant's name for security deposits. And a credit card that we use exclusively for rental expenses.
No LLC, we just fill out schedule E during taxtime.

oldladystache

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Re: do you have a business account for your rental?
« Reply #8 on: February 08, 2014, 03:33:21 PM »
I had a rental house or two for most of 30 years and I never had a separate account.

arebelspy

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Re: do you have a business account for your rental?
« Reply #9 on: February 08, 2014, 03:46:09 PM »
I had a rental house or two for most of 30 years and I never had a separate account.

And how many times did you use the insurance because of a fire, or liability lawsuit?  I'm guessing 0. But I bet you still had it.

The separate accounts is similar: you probably won't need it.  You could probably get away with not having it.  But if you do need it, you'll be glad you have it.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

Fireman

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Re: do you have a business account for your rental?
« Reply #10 on: February 08, 2014, 04:19:08 PM »
We also have a CD in each tenant's name for security deposits.
When the tenant decides it's time to go, who gets the interest generated by the CD?

And a credit card that we use exclusively for rental expenses.
The credit card is a great idea and i'm going to start using one of mine exclusively for the rental.  Until now, I had just reimbursed myself from the rental account.

arebelspy

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Re: do you have a business account for your rental?
« Reply #11 on: February 08, 2014, 04:29:36 PM »
We also have a CD in each tenant's name for security deposits.
When the tenant decides it's time to go, who gets the interest generated by the CD?

That sort of stuff is usually dictated by your state laws (or not, in which case you keep it).
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

monarda

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Re: do you have a business account for your rental?
« Reply #12 on: February 08, 2014, 06:46:57 PM »
We also have a CD in each tenant's name for security deposits.
When the tenant decides it's time to go, who gets the interest generated by the CD?

That sort of stuff is usually dictated by your state laws (or not, in which case you keep it).

Yes, local laws say interest goes to the tenant. It's their money, after all. Most of them have been great.  Our city used to require 5% interest, not anymore.

Hamster

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Re: do you have a business account for your rental?
« Reply #13 on: February 09, 2014, 05:41:12 PM »
I'd add that some states require that the security deposit is placed in a separate account.

clarkfan1979

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Re: do you have a business account for your rental?
« Reply #14 on: February 16, 2014, 11:03:50 AM »
I like a separate account because I can more easily track performance. I am not aware of the advantages of a business account. Two, it's less work when you need to provide financials to a bank for a re-fi or new purchase.

Guizmo

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Re: do you have a business account for your rental?
« Reply #15 on: February 16, 2014, 07:19:13 PM »
clarkfan:

I am considering buying an investment property with a loan. Would the bank ask me for bank statements proving income from my current rental? If so, it would definitely make it easier to have another account.

arebelspy

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Re: do you have a business account for your rental?
« Reply #16 on: February 16, 2014, 07:27:30 PM »
clarkfan:

I am considering buying an investment property with a loan. Would the bank ask me for bank statements proving income from my current rental? If so, it would definitely make it easier to have another account.

Typically they want to see it claimed on your taxes for two years in order to count it.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

clarkfan1979

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Re: do you have a business account for your rental?
« Reply #17 on: February 28, 2014, 05:34:48 AM »
Yes, they want to see the rental income claimed on your taxes. I was unaware of the 2 year timeframe.