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How to Choose the Right Bank for Your Rental Property Business

choose-right-bank-rental-property-businessChoosing a bank that has the right services for your Baltimore County rental property business needs should involve careful consideration.  After all, you don’t want to entrust your money to a bank that is led by someone such as William R. Beamon.

Beamon swindled more than $20,000 in rent payments and security deposits from unknowing tenants who were leasing a property that was in fact not owned by him, but the bank he worked for.  Incidents such as this can be the downfall of your entire business.

Fortunately, most banks are not concealing such fraud.  However, some banks are full of bank fees, special policies, and poor customer service, all of which can also have a profound effect on your success as a property owner.

Today we are going to look at the specific services and policies that you should compare before deciding which bank to use for what is destined to be one of the largest investments of your life.


Banking Features That Should Not Harm Your Baltimore Rental Business

 banking-features-should-not-harm-baltimore-rental-businessBelow is a list of some of the most important features all banks should offer property owners looking to finance their next Baltimore County rental property.  The key here is that these features should help you pursue rental property success.


Transaction Fees

It’s no surprise that many banks make the bulk of their money off charging their customers hefty bank fees.  Of course, the best banks keep their fees as low as possible.

While it is unlikely that you will pay zero fees to your bank, regardless of which one you choose, you can lessen the cost by evaluating the types of transactions you regularly conduct each month and determining the bank’s related fees and charges for them.

For instance, returned check fees may not apply to you if you or your Baltimore County property management company collect the rent via an online portal.  However, transaction fees may apply if you are regularly transferring the money from that online portal to your bank account.


Direct Rent Deposits

If you are self-managing your Baltimore property and want to collect rent online rather than deal with the hassles of mailed or hand-delivered checks or money orders, consider a bank that has this service built in.  With direct deposit rent collection, your tenants can pay their monthly rent and it will transfer straight to your bank account.  This means no more transferring of money into your account or related transfer fees.

That said, you should consider the fee charged to your tenant for using the payment service through your bank.  If you do not allow alternative methods for paying the rent, and the bank you choose charges large fees to tenants to make online rent payments, there is a chance your tenants will not be happy with that added fee.


Online Banking

Most banks offer online banking as a convenient service for their customers.  As such, it is crucial to compare each bank’s online banking features.  Features to look for include:

  • Accessibility of account balances, activity, and history
  • Transfer of funds both internally and externally to other banking institutions
  • Recurring or future-dated transfer setup
  • Viewing of check images
  • Ability to reorder checks
  • Bill pay services
  • E-bills and notifications
  • Security measures including password changing, user ID requirements, security images, phrases, and challenge questions
  • Online banking guarantees
  • Online statement access
  • Paperless options
  • Ability to download and save statements and/or print them


Banking Hours

Some things must be done in person when it comes to your rental property banking needs.  For example, cash or check deposits, opening of new accounts, or applying for additional loan financing is typically done with a banker in person.  And, if you are a property owner that also works a 9-5 pm job, it may be difficult for you to make regular trips to the bank to take care of these matters.

Looking for a bank that has extended hours or is open on Saturdays will help tremendously if making trips to the bank is something you plan to do frequently.


Special Services Just for Baltimore County Property Owners

 special-services-baltimore-county-property-ownersAs a Baltimore County property owner, there are some special services banks can provide to meet your property business needs.  Let’s look at some that may be beneficial to you:


Financing Services Tailored to Property Managers

Having a banker that is experienced in investment property financing will help a great deal when it comes to your overall success.  Understanding the mortgage process, the complications that may arise, the different loan options, and of course, helping you get qualified at the rates you want, are all things a dedicated real estate banker will be able to do for you.


International Banking Services

Are you Baltimore property owner that lives outside of the United States?  If so, you will need to bank with a financial institution that offers international banking services.  If you want to receive your rent payments on time and have the ability to perform international wire transfers, look into the banks you are considering and see what they can offer you as far as foreign banking is concerned.


Separate Accounts

Some states require property owners to maintain their tenant’s security deposit in a trust account.  At the very least, most states require a separate bank account for holding security deposits.

Most Maryland leases require some sort of security deposit.  In addition, it is required that property owners keep any collected security deposits in a federally-insured financial institution and in a separate account designated specifically for security deposits.  The money must then be deposited into this account within 30 days of receiving it, and any deposits over the amount of $50 must bear interest at a rate of 3% per year starting six months after the deposit was received.

Finding a bank that will support you having a separate bank account for your security deposits without wreaking havoc on your pocketbook with extra fees, charges or special requirements, is the best solution for fulfilling your obligation as a property owner dealing with security deposits.


Customer Service

Before making your final decision on which bank to choose for your rental property business needs, visit the bank and meet the people with whom you will be conducting business on a regular basis.

Make sure the bank you are interested in can answer all of your questions thoroughly, returns your phone calls or emails promptly, and treats you as though you are already a trusted and loyal customer.  It is important you feel comfortable with the bank you choose as well as those that will be caring for the finances that fund your investment property.


In the end, the bank you choose to use for your rental property business needs will be determined largely by which specific services you require to conduct your business in an efficient and financially sound way.

Comparing the different options in your area and researching each service that they offer is a surefire way of making the best decision for your property business needs.

If you need help with your rental property bookkeeping tasks, contact Bay Management Group today.

As a highly qualified property management company in the Baltimore area, Bay Management Group can help you keep your financial records in order.  By providing full transparency when it comes to your property’s profits and expenses, and helping you keep all of your property’s important documents safe and secure, Bay Management group gives you the peace of mind that not only the bank you chose is the best option for you, but the company you entrust to manage your property is as well.