How To Set Up Your Bank Account as a Real Estate Investor
Many investors have joint venture partners (JVs). This is a great way for maximizing your investment scope, but it requires some special logistics for structuring bank accounts. Specifically, property-specific accounts should have both your name and your partners’ name on them and you should open a separate account for each property. This is critical. Without having individual accounts per property, there will be no way of having any clarity around a property’s overall profitability.
Table of Contents - How To Set Up Your Bank Account as a Real Estate Investor
When setting up a joint access account for properties you manage with a JV, make sure to set very clear ground rules. Money should only move in and out of these accounts if you’re both in agreement or on a schedule you’re both familiar with.
A NOTE ABOUT CREDIT CARDS
In addition to your bank accounts, it’s a good idea to have one or two business credit cards, paid-by or tied-to your main business account. It’s much easier to pay for expenses with a credit card and most business credit cards serve a multipurpose role in strengthening your business:
- Good use of your business credit card will improve your credit score, which can help with future financing.
- Many business cards have rewards points or incentives that you can use to supplement your revenue or pay back expenses.
- Many cards will have features like balance transfers or 0% APR, which add a safety net to your operations.
A business credit card generally makes life easy! Especially if you use it more like a debit card and less like a credit card (charging only funds you have on-hand), it’s a handy tool in your overall financial structure.
MISCELLANEOUS ACCOUNTS
In today’s modern digital world, there are also non-traditional accounts to consider. PayPal, Square, Venmo and a variety of other payment and banking apps are quite popular. If you decide to use these, make sure they’re properly managed. Use them for a specific purpose and have records of every transaction. These types of accounts can be a great advantage, but they can also create headaches if you’re not diligent in managing them. Remember, bank account and finance structure is all about organization. The more organized you are, the more headaches you’ll avoid when it comes to things like paying bills, filing taxes, collecting rent, paying contractors and, of course, paying yourself.
AS SEEN ON TV! Monika Jazyk, Rachel Oliver and Gillian Irving are the “The Mothers Of Real Estate” (aka MORE) and hosts of MORE TV. With almost 30 years of combined experience and over $100M in deals across multiple strategies, investors looking to get started (or re-started) on a profitable real estate journey have been turning to MORE for their comprehensive training on real estate investing fundamentals since 2016. For more information and to register for their online course: “7 Steps for Profitable Rentals” click here.
**Valued visitors to Canadian Real Estate Network get 50% off ** PROMO CODE: CREN50
Basic Banking: Opening a Bank Account
Interested in Rental Property Financing? If so, contact us and we will show you how you can buy unlimited rental properties with great rates.