Investment Property Bank Account

One of my readers recently sent me an email asking questions about having a seperate bank account for his investment property and the pro’s and con’s of seperating your investment property money from that of your everyday money.

This is a great question and I believe will help craft together some top information for people looking for how to setup a bank account specifically for your investment property and the reasons behind it.

Getting a seperate property account

The short answer is YES. You should treat your investment property like it is a small business, seperate from your day job and all your bills. Doing this helps you keep on top of your rental expenses and upkeeps along with the earnings you have made. You can also attach a high interest savings account to it and deposit the earnings into it to earn money on your money!

Seperate account for tax reasons

Remember that tax can be complex when you have an investment property, so for that reason alone you will want to have a seperate account so that you can easily sift through your incoming and outgoing payments come tax time.Remember you have to keep your receipts and statements/documents for tax for upto 5 years!

Benefits of seperate account

• Seperates money made from property to that of everyday cash.
• Allows for easy book keeping come tax time.
• Allows you to monitor payments in and out in one account.
• Having a seperate account means you can setup auto payments and bookworking features.
• Earn high interest on your savings to maximise investment earnings.
• You cannot spend the money easily, depending on how you setup the account of course.

Negatives of having a seperate account

• Money is hard to access (this is either a pro or a con for some)
• You have to maintain another account, fees, transactions, setting things up

I suggest looking into high interest accounts that can be used as fully functioning seperate accounts for your investment property.

Further reading on investment propertys and tax

• Tax tips for Investors of property – News Ltd.

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