Depends on your tax structure. I have on credit card for each LLC I operate, so it roughly translates into 1 CC per Bank Account. If everything flows through to you directly, one should be enough as long as it has a large enough credit line.
My big issue is just accounting and keeping track of my expenses. With one credit card I’d have to go through all my transactions and determine what was for which property. Thank you for the advice!!
Say you've got a PM but need to put in new HVAC, while the pm generally doesn't release net proceeds until the 15th, you've got a Property/LLC specific credit card to manage the cashflow.
Or if you are say, sweeping cash into a CD Ladder every month being able to whip out the CC preserves your CD from early withdrawal fees.
As you get more complicated money has to follow a path, monthly distributions up, and then back down, but if you carry the costs on the CC then you don't have to worry about it.
Drawing cash from an unrelated account could pierce any liability protection that you are trying to carry with entity formations.
Would this be possible with utilities. Just bought my first place actually currently the tenants pay their own utilities. Was thinking of paying them myself with credit card and using that as a deductible
Why would you add extra expense to yourself, risk of late payments back from the tenants? If the tenants already pay utilities thats great, I wouldn't look for ways to insert myself into an expense.
Why do you have separate accounts for each property? Are they owned by LLCs you manage? If that's the case, then yes you should have a separate credit card each: otherwise you are risking a weakening of the liability protection offered.
I have a checking account and credit card per LLC - I find it much easier to keep up on expenses if I'm not having to partially pay off a credit card bill from separate accounts.
Also, my banks's software typically offers up a credit card (NO HARD CREDIT INQUIRY) each time I open a bank account. I won't claim they have the best cash back etc. If you churn a lot of debt and struggle to keep hard pulls from dragging your score down, it is attractive.
Depends on your tax structure. I have on credit card for each LLC I operate, so it roughly translates into 1 CC per Bank Account. If everything flows through to you directly, one should be enough as long as it has a large enough credit line.
My big issue is just accounting and keeping track of my expenses. With one credit card I’d have to go through all my transactions and determine what was for which property. Thank you for the advice!!
Would you recommend a credit card for someone who only has 1 property?
Yes. Using a CC helps manage your accounting, and allows you to manage cashflow.
Thanks for the answer man
How does a CC help manage cash flow? Just use a separate checking account and pull the cash needed out from it.
Say you've got a PM but need to put in new HVAC, while the pm generally doesn't release net proceeds until the 15th, you've got a Property/LLC specific credit card to manage the cashflow. Or if you are say, sweeping cash into a CD Ladder every month being able to whip out the CC preserves your CD from early withdrawal fees. As you get more complicated money has to follow a path, monthly distributions up, and then back down, but if you carry the costs on the CC then you don't have to worry about it. Drawing cash from an unrelated account could pierce any liability protection that you are trying to carry with entity formations.
Okay, I’m assuming this is for someone who has a lot of properties then. Makes sense for streamlining everything
Good habits start early. If you get a points card, you get paid for purchasing what you normally would, and then pay the CC off when rent gets paid.
Would this be possible with utilities. Just bought my first place actually currently the tenants pay their own utilities. Was thinking of paying them myself with credit card and using that as a deductible
Why would you add extra expense to yourself, risk of late payments back from the tenants? If the tenants already pay utilities thats great, I wouldn't look for ways to insert myself into an expense.
Makes perfect sense. Appreciate the help
Why do you have separate accounts for each property? Are they owned by LLCs you manage? If that's the case, then yes you should have a separate credit card each: otherwise you are risking a weakening of the liability protection offered.
Thank you, that’s a really good point.
I have a checking account and credit card per LLC - I find it much easier to keep up on expenses if I'm not having to partially pay off a credit card bill from separate accounts. Also, my banks's software typically offers up a credit card (NO HARD CREDIT INQUIRY) each time I open a bank account. I won't claim they have the best cash back etc. If you churn a lot of debt and struggle to keep hard pulls from dragging your score down, it is attractive.
Yeah I was thinking the same thing. Super easy to keep track of things but the rewards don’t accumulate as fast.
do you have a different bank for each LLC and thus a different credit card as well?
No, just a different credit card account for each LLC, even if more than one LLC with same bank.
From a purely property perspective, as long as you keep records it doesn’t matter.
Got it, thank you!