Real estate investing can be fun, but it is still a very financially-oriented business. Not only are you going to have to find the right properties and hire reliable tenants, you will also have to choose a partner that supports you at each stage of your investment — and the bank is an important one. Choosing the right financial institution to receive funding for your rental property investments is not an easy decision and one that has the best bank for rental properties in what you can achieve with your investments. In this guide you will learn what steps you should take to determine the right bank for rental properties to help you reach your investment goals so your financial engine runs as smoothly as your commercial real estate operations.
Understanding Your Investment Strategy and Needs
Before you can even begin comparing banks you must first determine your own investment strategy. Are you just starting out with a single family home, or are you a seasoned investor scaling up to a multi-unit portfolio? Your investment strategy will dictate what you need in terms of banks. For example, an investor looking for slow growth with long term holds requires different things from an investor seeking aggressive fixes and flips. Also consider how many transactions you will make per month: How many deposits will you make per month? How many Baselane accounts will you make? Will you have to separate funds for each property? Answering these questions gives you a breadth and depth to compare all the banks with. This is very important because you are basically seeking a partner instead of an account, and it’s the foundational step in figuring out what is for your specific situation.
The Critical Role of Financing and Loan Products
For most real estate investors, a bank is their lender. What they have specifically in mind when financing your investment can mean the difference between success and failure. So when you are shopping around for a bank, look past their advertised interest rate. It’s important to look at what kind of loans they allow you to receive in addition to what they let you take out on regular loans. Are they okay for you to take out portfolio loans on multiple properties? What’s the down payment required? This is always a more significant portion for investment properties than primary residences! Also look at their underwriting policy. Do they consider rental income when the bank determines that you will qualify for the loan? A bank that knows its industry will be underwriting differently than one who doesn’t treat an investment property like the same as a primary mortgage. This is why we call us Business Bank Features Once the property is acquired, your focus shifts to management, and cash flow is kin the day-to-day banking features become paramount. You need a business checking account that is the best bank for rental properties. Cash Flow Management and Ban handle the amount of transactions to balance out all those transactions without having to pay excessive fees. Look for accounts with high or no monthly transaction limits, low minimum balance requirements, and a great online banking option. Being able to accept electronic rent payments and paying vendors and contractors over the internet isn’t going anywhere, now that it’s needed for efficiently running your business. The proper financial institution should provide a solution to making it so simple to track income and expenses. This is one of the fundamental parts of successfully running your portfolio. This is one of the core services of the best bank for rental properties.
The Power of Integration Banking and Property Management
In today’s digital age, the most struggling and greatest advancement for real estate investors is the ease in which banking can be integrated with property management software. This is where the battle lines are drawn for real estate investors. Manually tracking expenses across multiple properties and accounts is only going to lead to error and lost time. The modern solution lies in platforms that will automatically link with your bank accounts. For example, a platform like Baselane ties directly to your financial institution and automatically categorizes income and expense for each property. This will give you a snapshot on what’s going on in your portfolio right now and make tax-preparing a breeze. The combination of these two technologies can give you data you can use to make smart decisions about how you’re doing (and how you’re doing it). What’s important to note is that choosing a bank that’s compatible with, and even partners with, these new technologies will make a world of difference in how much back-office work you do. You will ultimately want to find a bank that fits with Baselane.
Evaluating Digital Experience and Customer Service
It’s no longer necessary to have a brick-and-mortar bank. This is especially true for highly tech savvy investors. So the quality of a bank’s digital offerings can make or break the deal. The mobile Baselane and online portal should be intuitive, reliable, and feature-rich. Are you able to deposit checks from anywhere? How easy is the bill pay platform to use? When you are looking for answers to any questions about a transaction or want to wire money to close out a new property, you want to talk to someone who can help you without endless transfers. The best bank for rental property will have both powerful digital capabilities but also compassionate and responsive human service.
Fees and Account Structures Reading the Fine Print
Banks are businesses. Often the way the bank makes money is through fees. You really need to know the entire fee structure of the bank you’re considering. Some of the usual fees will be: Monthly maintenance fee, per-transaction fee, wire transfer fee, ATM fee Many banks will waive these fees if you maintain some minimum balance, or with a linked business savings account. You can just calculate how many transactions you expect to make per month and model those with the fees of that bank. A bank with a little more interest but less fees might be a more profitable financial model than a bank with a little less interest but a pretty severe fee schedule. Every one of these is one of the most important things you can do to find the really best bank for rental properties for the financial picture you’re currently at work with.
Conclusion
When it comes to investing in rental properties, you will often call the roar of the engine your bank. Your bank provides more than just your daily checking account, it offers savvy financing, useful cash flow management software, and with integrations into platforms like Baselane you have access to the clearest, most comprehensive baselane of your financial picture to date. When you take the time to really examine all the different options available to you based on your unique investment strategy, you can select a bank that will help you streamline operations, improve bottom-line profitability, and grow your portfolio armed with confidence.
