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How to Obtain the Right Business Banking for Landlords


Operating a rental business requires owners to establish many different processes to remain organized and efficient. Of these, one of the most vital is financial record keeping. That said, failing to maintain organized data as your portfolio grows can quickly become overwhelming and spell disaster. For landlords, choosing the right bank for your business is critical as the services you need are often unique. So, whether you are looking to streamline rental payment collection, effortlessly handle escrow, manage invoicing, or prepare for tax time, check out our tips on banking for landlords below.

Best Rental Management Software for Tracking Expenses

Landlords get bombarded by paperwork at every turn, and it can be a challenge to maintain accurate and complete records. That said, technology now plays a key role in the property management industry. Therefore, owners can use software solutions to help complete many tedious and time-consuming administrative tasks with ease. Check out some of the most popular programs below.

  • AppFolio Property Manager – Appfolio is an industry leader for all things property management, including ways to streamline banking for landlords.  Their full-service property management software allows owners to manage all management tasks on a single user-friendly platform easily. With Appfolio, users can customize reports and take advantage of online rent collection tools, convenient owner/tenant portals, and handy maintenance tracking.
  • Landlord Studio – Banking for landlords, does not need to be an arduous task. Landlord Studio is a user-friendly platform committed to taking the guesswork out of rental business accounting. Therefore, owners can easily import bank transactions and digitize receipts to see real-time account information. Additionally, users can view and reconcile transactions from anywhere, directly through a convenient app.
  • Propertyware – Thanks to its easy-to-learn platform, Propertyware offers a wide range of customizable options designed for the single-family property manager in mind. Additionally, there is room to expand as your portfolio grows, and with plans starting as low as $1/month per unit plus a startup fee, it is definitely worth checking out!
  • Buildium – If you need an all-inclusive service, Buildium is a top choice. This software includes a wide range of convenient accounting functions, from daily reporting to help with tax filings. That said, Buildium also offers online tenant portals, a professional website, and easy-to-use community management tools. Also, plans begin at just $50 per month.

How to Establish Efficient Banking for Landlords

  1. Choose the Right Bank or Credit Union
  2. Do Not Co-mingle Funds
  3. Itemize Expenses to Track Profits and Prepare for Taxes
  4. Track Expenses in Real-Time
  5. Create Key Reports
  6. Set Up Automatic Payments
  7. Establish an Escrow Account
  8. Periodically Reconcile Records

How to Establish Efficient Banking for Landlords

Choose the Right Bank or Credit Union

Regarding banking for landlords, property owners must seek out the financial institution with the best mix of customer service, technology, and features. This decision is vital to ensuring smooth transactions and success in investing. With that in mind, let’s review some key questions to help landlords choose the best bank for their business.

  • Do They Have Direct Rent Deposit Capability?
  • What Online Banking Services Are Offered?
  • Do They Offer Financing Services Tailored to Property Managers?
  • What Are Their Transaction Fees?
  • Are the Hours of Operation Conducive to Your Business?
  • Does the Bank Have International Banking Services?
  • How Would You Rate the Customer Service?

 Pro Tip: Rental property owners face unique financial challenges. So, are you looking for additional advice on banking for landlords? Check out our blog on how to choose the right bank for your business.

Do Not Co-mingle Funds

Business and personal finances are something that needs to be kept separate at all times. Not only does this simplify banking for landlords, but it also saves time at tax time. In addition to keeping personal finances separate, keeping each property unit separate is a good idea. So, for example, if you own 4 rental properties, each should have its own account. Thus, allowing owners to track expenses and profits more easily!

Itemize Expenses to Track Profits and Prepare for Taxes

Banking for landlords requires meticulous recording of all incoming and outgoing transactions. Not only is this necessary for determining if the rental property is a profitable investment, but these records are also essential to tax preparation. Carefully itemizing and categorizing expenses as they occur will save time and headaches as landlords prepare to file their Schedule E tax forms. Therefore, try to break down costs in the following categories and always work with an experienced tax professional to ensure you take advantage of all deductions –

Itemize Expenses to Track Profits and Prepare for Taxes

  • Collected Rent
  • Refunds from Tenants
  • Marketing or Advertising Costs
  • Travel Expenses
  • General Cleaning and Maintenance
  • Insurance Premiums
  • Legal Fees
  • Management Fees
  • Mortgage Interest
  • Office Expenses and Supplies
  • Taxes
  • Utilities (if paid by the landlord)
  • HOA
  • Bank Fees

Track Expenses in Real-Time

Many landlords get overwhelmed and allow administrative tasks to pile up. Recording financial transactions as they occur, or at minimum on a daily basis, is crucial. Ideally, utilizing property management software and effective banking for landlords may automate many tedious recording tasks such as incoming rent payments or assessment of late fees. That said, it is still important to reconcile records periodically so any small errors do not become a larger issue or potential dispute. However, without this automation, landlords must be diligent and prioritize time to record all financial matters.

Create Key Reports

Understanding the profit and loss associated with each investment is essential to making informed decisions as a rental owner. That said, creating some key metric reports can help provide a quick snapshot into expense trends and a summary of overall financials. Moreover, for those with Excel knowledge, setting up your own custom report is simple. However, for those that use property management software, it may offer customizable report options.

Set Up Automatic Payments

Technology works, so make it work for you! Whenever possible, use technology to automate the repetitive tasks every landlord must do. This includes paying the mortgage, insurance premiums, and any other predictable monthly expenses. While this type of banking for landlords may take more time to set up initially, it is a huge timesaver in the end. That said, be sure the payments are set to come from the correct property account so everything can be easily tracked and recorded.

Establish an Escrow Account

In some jurisdictions, landlords must open a separate escrow account to hold tenant security deposits. However, even if not required in your area, it is a good business practice. Escrow accounts establish a neutral place to hold security funds for the duration of the lease. That said, laws and guidelines may vary; however, states may require the following –

  • Owners need to set up an escrow account and deposit any security funds into a financial institution.
  • Out-of-state landlords need to open a local account near the rental property.
  • In some locations, landlords must deposit security funds into an interest-bearing escrow account.

Periodically Reconcile Records

While technology can make a landlord’s life easier, it does not replace the need for good old-fashioned reconciliation. So, periodically, compare receipts and transactions against financial reports and address any discrepancies right away. Moreover, establishing these financial practices early on in a rental business will help ensure success as investors grow their portfolios.

How to Enjoy Effortless Rental Ownership

For landlords, the to-do list never ends. Whether it is maintenance, leasing, marketing, accounting, or customer service, rental owner tasks can become overwhelming even for seasoned investors. In addition, as you can see above, banking for landlords also demands valuable attention. However, all of this is time taken away from what owners want to do, whether enjoying their daily life or chasing after the next big deal.

Savvy investors know that the key to success is partnering with an experienced professional property management group. That said, the experts at Bay Property Management Group understand the unique challenges landlords face and strive to make rental ownership the profitable and enjoyable experience it should be. Our team manages the day-to-day tasks to ensure tenant satisfaction and maximum profit potential using the latest technology. So, if you are interested in full-service property management, give us a call today to learn more.