still confused ---info from people who own multiple properties

General Real Estate Investing
1

okay—i have my first Duplex–almost a month—i know i need to do something with my banking situation. My confusion lies with—i am about to buy another property in another state. Can i just set up one biz account and have all rental income from several properties come through it. --or better to have seperate account for each property—which seems complicated–but if each property is in seperate LLC—i t would seem i would have to have seperate banking accounts. thanks

2

Each property does not, necessarily need a separate account.

Each LLC needs a separate account.

I run 4 rentals out of one account now…

Keith

3

I tried the separate accounts first. WHAT A PAIN!.. Each rent should go into each separate account and each property’s expenses should be written from each account.

Then when I needed to buy something expensive for the property and there wasn’t enough in the account, I had to borrow from the other property that had money in the account. It was agonizing.

Now I use 1 account for 9 properties and separate them using Quicken. (NOT QUICKBOOKS, it’s overkill) It is so much easier than maintaining multiple accounts. Please learn from my experience and use one acct.

4

Each property is not, or should not, be considered a separate business. You are in the RE business, so you should have one RE business checking account.

Besides what Jeff mentioned above about money, it is not smart taxwise either. Your CPA or accounting professional can detail more, but in short, by using only one business, you can offset gains from one property by losses on another. Also, it is much easier to be classified as an “active” business, rather than a “passive” business. Again, better tax treatment.

I’m with Jeff on Quicken, too. Quicken Business is great. Don’t really need anything else. Simply setup each property as a separate “class” within quicken and keep up with expenses normally. Then you have company expenses as a whole, but can pull each “class” and get detailed expenses for them as well.

Raj

5

thanks everybody—really appreciatate your opinions. On these theads—separate LLC ,etc seems to be the majority opinion. —and though a novice—not for liabilty–just biz—one accout that everything runs through—seems simple. Soon i will hire a (Hopefully) pro. Just try to figure somethings out. THANKS again!!!