Taxes can be a burdensome task if you do not have everything set up correctly. In December, I decided to rent out my house as an investment property but totally forgot to set up a new account and activate a new credit card for the property. Thank God I remembered only three months in; instead of a year later. If you have an investment property, here are some good reasons why you should open up a new account too.

Distance yourself from the bills: You need to keep your finances separate from your investment property’s finances. “Never mingle rental income with your personal funds. Learn the law in your state about handling tenants’ deposits. Some states require a special escrow account. If not, keep the money in a separate savings account. “It’s extremely important that landlords — I don’t care what state you’re in — don’t treat it like it’s your money,” says Edwards.”

Get a credit card: If you get a separate credit card for your investment property, it will be much easier to track expenses. At the end of the year you can calculate how much extra money you’ve put into the house and possible write-it off on your taxes. I would also highly recommend using this credit card to pay for your reoccurring bills from the property such as: home warranty fees and any kind of maintenance fees. 

Bill pay the bills: Having everything done automatically can reduce your stress levels big time, so pay the investment property’s bills automatically through your checking account. Bills should include: mortgage, credit card, utilities*(avoid paying your tenants utilities), homeowner’s fees, and repair cost.

By separating your regular account from your investment account, you should save yourself a good amount of time and money when tax time comes around. *eFIPO’s Rule* Multiple transactions is a good thing when it comes to an investment account. A better paper trail can save you if you ever get audited.