I'd like to hear your thoughts about a strategy I plan to use in order to manage incoming/outgoing money from my rentals. I expect to have 6 individual units when all deals finalize. My goal is to minimize my personal involvement, separate my personal finances and track detailed income/expenses. I also want to position my management to be well viewed by future lenders.
Accounts
#1: used for accepting and temporarily holding rent payments until they can be shuffled on to monthly, auto-payed expenses (mortgage, escrow account #2, repair savings). This account will maintain at least three months of regular monthly expenses.
#2: a savings account used as escrow for annual taxes and insurance
#3: a savings account used for saving cash for repairs and other unplanned expenses.
Process:
Each month, rents come into account #1, payments are made to monthly expenses (mortgage, etc.), escrow (account #2) and repair savings (account #3). If there is anything left over (profit), it goes to my personal account. I will probably use mint to track detailed, by unit, expenses along with budgets unless I can find a bank or other service that will enable me to do something similar.
Thoughts? How do you do it currently?