Paying expenses
Write a check, use the entity debit card, or wire funds directly from your plan entity bank account for every property-related expense: mortgage payments, property taxes, insurance, HOA dues, repairs, contractor invoices, property management fees, and utilities. There is no approval process and no third-party intermediary. You sign as manager or trustee and the payment goes out.
Personal funds may never be used, even temporarily. There is no reimbursement mechanism. If the plan account runs low, the answer is ensuring the plan is adequately funded, not bridging the gap personally.
Receiving rent
Tenants make rent payments directly to the plan entity. The lease agreement names the LLC, IRA Trust, or Solo 401(k) trust as the landlord. Payment instructions given to tenants should direct funds to the plan entity: by check made payable to the entity, ACH, or wire to the entity bank account.
If you use a property manager, the manager collects rent on the plan's behalf and remits the net amount, after deducting their fee and any expenses they've paid, directly to the plan account. The arrangement is between the plan entity and the property manager, not between you personally and the property manager.
Using a property manager's account
Property managers typically collect rent into their own account before remitting to owners. This is standard practice and does not create a compliance issue, provided the property manager is remitting funds to the plan entity account, not to you personally.
Frequently Asked Questions
Can tenants pay rent through Venmo, Zelle, or similar platforms? These platforms work well for personal use but are generally not available to commercial or entity accounts. Opening a Venmo or Zelle account for a plan-owned LLC or trust is not a standard offering from these providers. More importantly, you cannot accept rent payments through your personal Venmo or Zelle account and forward them to the plan: that routes income through you personally, which constitutes a distribution from the plan. Stick to standard banking channels: tenant check, ACH, or wire directly to the entity bank account.
Can I use online rent collection platforms? Yes, with caution. Some landlord platforms, such as those offering online rent collection, maintenance requests, and tenant portals, can be set up for entity accounts. Confirm the platform supports a non-personal business entity before using it, and ensure that collected funds are deposited directly to the plan entity's bank account.
What if a tenant pays me personally by mistake? Do not deposit the funds personally. Return the payment to the tenant and have them reissue it correctly to the plan entity. A personal deposit, even unintentional, may be treated as a plan distribution. If this occurs, consult a tax advisor promptly.