Question on Power Bank Accounts Quickstart Edition

[Nir]

Hi,

During a quickstart event I participated in last year, material was handed out on Proactive lanldording/power bank accounts.

The only thing I find a little confusing is in the diagram it is mentioned "one bank account for ALL of your own properties". later it is mentioned "one bank account for EACH personally owned property".

I guess they meant one account for each property(?) but wanted to ask how you manage them - really have a separate bank account for each property or just one bank account for ALL of your personally owned property?

(There were other types of accounts mentioned for JV and Rental Pool Units. My question is only about personally owned properties.)

THANKS.

 

[navaz]

I find one bank account per propety is a nice idea- you get a good income and expense snapshot from the bank account - trouble starts when you run short of funds on one property or someone makes a mistake in making deposits or writing cheques- so you need to look at the pros and cons -a right way does not exist -just preferences. I manage one account for my rental properties

 

[TodorYordanov]

This is a post I had on this issue from awhile back.Here is what I did:

1 Open a chequing account with President`s Choice and order cheques at the same time. Cheques take 5 or more business days to arrive - keep that in mind.

2 At the same time open a savings (interest plus) account. This account may be used to store all last month rent cheques or security deposits, it pays 3.25% interest. It can not be used for debits or Interac payments. If you need to access the money in this account you need to move them to a chequing account and wait 24 hours before it is available.

3 When you open those 2 accounts you will get a bank card.

4 Open 2 more chequing accounts (one for the property I am in the process of buying, the other for my next purchase). Link them to your bank card. Now you have 3 chequing accounts. They are all independent and separate. Decide which one will be designated as "master". It makes no difference whether it is the first that was opened or last, I picked the one with the easiest 4 digits to remember.

5 With your bank card you can only access withdrawals, Interact payments, etc. on the account that is linked to the checking button ( all other chequing accounts are under "other accounts" button). Link your "master" account to be the chequing account on the card. The other account are only visible under "other accounts".

6 Leave the master account for general expenses related to REI investing - not property specific.

7 Have a separate chequing account for each property and pay expenses and make deposits related to this property from that account. See number 4.

8 When making deposit you must know your "other" chequing account numbers and what property it corresponds to. The screen on the back machine will only show you the last 3-4 digit of the account number. Some type of cheat sheet will be needed.

9 All accounts can be accessed on-line and Internet banking is available. You can move money around the accounts, order cheques, drafts, open more account - all on-line.

10 Properly label cheque books with the name of the property they belong to.

Happy banking.

I hope I got this right and it will be useful to other members.

Todor

 

[seanverret]

I`ve been using PC Financial as well for all of my properties. You don`t have to just go to Superstore, you can do your banking at any CIBC machine too.

 

[Nir]

Thanks Todor and Sean.

Does it matter if the property is under a corporation or not? in other words, is PC Financial good for both?

Sean, do you also have a separate account for each property like Todor? I am just not sure why 3 properties under ONE account is more work for my accountant or that I need them separated to understand how each property is performing independently (well it`s important to know but I just don`t need them in separate accounts to know they perform well). In addition, I thought the bottom line ALL properties is the important number which you get when they are all in ONE account. (again, you obviously want them all to perform well independently).

Thoughts?

Regards,
Neil

 

[MonteDobson]

QUOTE (investmart @ Dec 2 2008, 11:25 AM)
Does it matter if the property is under a corporation or not? in other words, is PC Financial good for both?




Hi Neil,



I tried to open a corporate account with PC and they accept Personal accounts only.

 

[Mitch Collins]

Hi Everyone;

Here is what I`ve done.

I have a seperate JV account for each JV partner. Then together we open joint accounts for each property.

At the end of each month, I bring all the cash flow from each property account into the JV account and we take the funds from that account.

I like to keep things very seperate..makes life a lot easier!

 

[Dan_Eisenhauer]

My preference is to have separate a/c for each property. I do not have JV partners for every property in my portfolio. But, who knows? Someday I may sell an interest in one of my wholly owned properties.

By keeping separate a/c I can show any given JV partner what is in that bank a/c at any given moment.

The biggest headache for me is reconciling the different accounts each month.

Trial and error, taught me to label my cheque book for each a/c.

A question that I will have for Navaz soon is, "Using an accounting program like QuickBooks, is it better to have each property as a separate company, or to run all the properties under one company, but with different account names?"

 

[KimFranz]

[A question that I will have for Navaz soon is, "Using an accounting program like QuickBooks, is it better to have each property as a separate company, or to run all the properties under one company, but with different account names?"]
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I would suggest that if you use Quickbooks that you could set up each property as a separate "class" rather than accounts, much easier to track and to produce reports for

Me, personally, I use separate bank accounts for each JV partner and also set up separate companies in Quickbooks for each JV partner and the properties that we hold together. There are other ways of doing it, I just find this way easier for me.

Kim

 

[seanverret]

QUOTE (investmart @ Dec 2 2008, 10:25 AM)
Does it matter if the property is under a corporation or not? in other words, is PC Financial good for both?



Sean, do you also have a separate account for each property like Todor? I am just not sure why 3 properties under ONE account is more work for my accountant or that I need them separated to understand how each property is performing independently (well it's important to know but I just don't need them in separate accounts to know they perform well). In addition, I thought the bottom line ALL properties is the important number which you get when they are all in ONE account. (again, you obviously want them all to perform well independently).


I don't think PCF will take corporate accounts - but you should ask them first.



I like having a separate account for each property, and even a second acount per property just for the damage deposits that has a higher interest rate. It makes things really easy to understand what my bottom line is w.r.t. that particular property.

 

[PARAMJIT001]

I am a big fan of PC financial as well. But the problem is time lag for accessing your funds. You need at least 24 hours after transferring the money from account to account. Some times it creates a headache.

Just keep in mind and plan appropriately.

 

[navaz]

QUOTE (KimFranz @ Dec 2 2008, 11:28 PM) [A question that I will have for Navaz soon is, "Using an accounting program like QuickBooks, is it better to have each property as a separate company, or to run all the properties under one company, but with different account names?"]
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My preference would be one set of quickbooks

Kim

 

[jaass]

Some banks will actually allow you to place a tag name on each of your accounts which makes it much easier to identify which account belongs to which property when you are doing ABM deposits. I normally just add as many characters of street name and if needed numbers of each property. Really helpful in making sure deposits are going into the correct accout.

I bank with BMO and the tag name for each of my accounts has been a real time saver and has really helped in keeping all the paperwork in order.

Just purchased Quickbooks Pro last night so will probably be loading up over the next couple of days. Does anyone have any tips on getting started?

 

[KDBrown]

QUOTE (jaass @ Feb 26 2009, 07:38 AM)
Some banks will actually allow you to place a tag name on each of your accounts which makes it much easier to identify which account belongs to which property when you are doing ABM deposits. I normally just add as many characters of street name and if needed numbers of each property. Really helpful in making sure deposits are going into the correct accout.



I bank with BMO and the tag name for each of my accounts has been a real time saver and has really helped in keeping all the paperwork in order.



Just purchased Quickbooks Pro last night so will probably be loading up over the next couple of days. Does anyone have any tips on getting started?




I do one-on-one training for Quickbooks, if you are interested in something hands on. I have worked in the accounting field for over 20 years & have been a REIN member for the last 3 years. E-mail me at [email protected] & we can take it from there.



Karen