In this video, Chris and Eli from the Landlord Gurus talk about landlord banking. What are the perks, should you get a banking service and account that is tailored to a landlord’s needs?
Topics in this video include:
- What is landlord banking? [0:33]
- Should landlords have a separate bank account? [1:11]
- What are the features of landlord banking products? [2:10]
- Virtual accounts [2:40]
- Integrating with your accounting software [3:32]
- Additional benefits of landlord banking products [4:51]
Eli Secor: Hi, this is Eli and Chris here from Landlord Gurus. Today we’re just gonna have a quick chat about a piece of technology and service that has come under our radar, primarily in the last couple of months, and that’s landlord banking. This is landlord banking services and accounts that are particularly for managing rental property. Chris, you’ve done some of the writing on this and research, you know more than I do, so give us a little bit of a rundown, if you would.
Chris Lee: Yeah, alright. Thanks, Eli. I guess the first question is, that a lot of people ask is, what is landlord banking? So I can go through that. And then they also ask do I need to have a separate bank account for my rental properties? The gist is, landlord banking is a broad term describing a bank account specifically geared for landlords and for rental property. There are certain features that they might have that cater specifically to landlords and that make things easier for us to manage our properties, such as tying into our accounting software and things like that.
First off, should landlords have a separate bank account? I think the answer generally is yes. I think first and foremost, having a separate bank account that’s tied to your rental properties and not to your personal accounts and your personal assets, is that it safeguards your personal assets.
For example, if something were to happen on your rental properties, and you get a lawsuit against you or something like that, this basically protects your personal assets from being tied up. Even if you’re not in the wrong, often, your personal accounts might just get tied up until the matter is resolved.
ES: They’ll freeze the bank account?
CL: Yeah, I think that can happen. So having a separate account for your properties versus your personal assets, maybe only your accounts that are associated with your properties might get frozen.
ES: Right. Okay. What are some of the features that go along with these products that might make our lives easier as landlords?
CL: There are some of these banking products, and we’ll talk about a few of them here. Specifically, a couple of our partners. So full disclosure, we are partners with Baselane, Stessa, and Azibo. So if you sign up for any of their bank accounts or any of their software products coming from our website, we do get a small commission.
Some of these products have what they call virtual accounts. And so that will allow you to, under one account, create separate virtual accounts that might be associated with an individual property or it might be associated with security deposits. I know that where we are, Eli, the law is that the security deposits that you received from your tenants need to be deposited into a separate account. Having these virtual accounts might allow you to save those security deposits in a separate account from where rent is being collected. That’s called co-mingling. With these landlord banking programs, or landlord banking products, you can avoid some of the co-mingling.
Also Read: Everything Property Owners Should Know About Security Deposits
Some of these products also have features that are tied to landlord software products. So, for example, Stessa or Azibo, you can collect rent, you have accounting features, and you can advertise. You can do all these other things that we’ve talked about before with your landlord software. But by having your banking tied directly into there, it just makes your life simpler when your rent deposits are going into a specific account and they’re being tracked automatically and tagged, and your expenses going out are categorized. So come tax time, it’s easier to pull together all your maintenance expenses and things like that.
ES: Now, these aren’t brick-and-mortar entities, right? This is all cloud banking?
CL: It is for the most part, but there are, for your protection, there are real banking entities behind this, with insurance and all that. So it’s not all just in the cloud. There are real banks.
ES: No, I didn’t mean to suggest it wasn’t real. It’s just that there isn’t a branch right here. It’s centralized.
CL: Exactly. You’re not gonna have an individual personal banker or anything like that. Some of the other features and benefits for these is that I’ve noticed that Baseline and Stessa offer higher interest rates than you might find through a traditional brick-and-mortar bank. I saw that as of February 2023, Baselane was offering somewhere around 3.3% and Stessa maybe was offering over 4% if you had a subscription to their premium account. I mean, that matters and that might be a big incentive for a lot of landlords. You may also get cash back rewards for using a debit card associated with your Baselane account. Especially for things like home improvement, if you take your Baselane debit card and use it at Home Depot, for example, you can get cash back.
So those are all good features, good rewards. Baselane, even right now, has a signup bonus for new users. So that might be something you wanna check out as well. If you sign up, open an account, or collect rent through Baselane. That’s something you can check out, you can find it on our site and get all the details there.
Then again, I think lastly just integrating with your accounting software, so come tax time, all your expenses, all your income is all there. You can export a report, hand it off to your accountant, your taxes are done.
ES: Yeah, they probably have specific reports catered to this and categories, right? So it’s super easy to categorize the types of expenses.
CL: They do. I saw that Azibo has all these different categories preloaded, so it’s easy to set up, and their accounting features were created by landlord tax accountants. So it makes it all super easy and super accessible.
ES: Great. Alright, well thanks for filling us in on this new development, Chris.
CL: Yeah. And we’ll have links to our articles on this topic where you can check out those products that we were talking about and sign up if you want. Like us and subscribe for more content like this.
ES: Alright, thanks for watching. This is Eli and that’s Chris from Landlord Gurus.
CL: Thanks everyone.
- Full-scale accounting functionality, and complementary suite of useful features make it a fantastic option for landlords and property managers looking to streamline their workloads, save time, and grow their business.
- Strength: Complete Solution
- Asset management and accounting software for real estate investors, including smart money management, automated income and expense tracking, personalized reporting and more.
- Strength: Accounting and Financial Tracking
Disclosure: Some of the links in this post are affiliate links and Landlord Gurus may earn a commission. Our mission remains to provide valuable resources and information that helps landlords manage their rental properties efficiently and profitably. We link to these companies and their products because of their quality, not because of the commission.