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Buying rental property through side company
Posted on 11/2/20 at 11:18 am
Posted on 11/2/20 at 11:18 am
I have a side company that brings in about 45k in profit. My partners and I are buying a rental property next week and already have tenants lined up. My question to the board is two fold.
1. Should I set up a subsidiary for the rental and any income coming in to keep it separate from the main company? If yes, I assume I would need a separate bank account. Also, how would I transfer money/property from one company to the other?
2. How would I set this up in Quickbooks. I assume I need a new revenue account for Rental Income, a new expense account for mortgage, but would I need a new fixed asset account to separate real estate assets from my regular assets (mostly equipment)?
1. Should I set up a subsidiary for the rental and any income coming in to keep it separate from the main company? If yes, I assume I would need a separate bank account. Also, how would I transfer money/property from one company to the other?
2. How would I set this up in Quickbooks. I assume I need a new revenue account for Rental Income, a new expense account for mortgage, but would I need a new fixed asset account to separate real estate assets from my regular assets (mostly equipment)?
1
Posted on 11/2/20 at 11:58 am to saints5021
Owners are Vendors, Tenants are Customers. Set up 2 bank
accounts.. #1 "Tenant security deposits" only.
#2 All other operating expenses
accounts.. #1 "Tenant security deposits" only.
#2 All other operating expenses
Posted on 11/2/20 at 2:50 pm to Shoalwater Cat
So you would do it under one company and create two separate bank accounts?
Posted on 11/2/20 at 8:37 pm to saints5021
Yes. Also, become very familiar with the state laws concerning control and final distribution of a deposit. Always remember it is the tenants money. Have very, very detailed documentation and photos of any damage and written estimates of the cost of repairs.
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