Lender · VA · Member since 2021 · 12 posts · 2 votes
I live in Virginia and I am getting ready to Airbnb a couple of rooms in my house. I was going to establish an LLC for it. Fund the LLC with a few thousand dollars, get a business credit card to buy furniture for the rooms and then pay off the card with money I made from Airbnb or the money I used to fund my LLC. I would then use all my business related expenses as tax write offs. I then realized two things.
1. I only plan on putting my rooms on Airbnb for a year and then closing the LLC which would mean I have to close my credit card accounts.
2. I plan on moving out of Virginia in the next year or so and I don't want to have an LLC here just holding my credit cards.
So my question is would it make sense to have a foreign entity LLC holding company incorporated in Delaware or Wyoming for my credit cards and then have the Virginia Airbnb LLC under it as a subsidiary? Then when I move close the subsidiary and set up another subsidiary LLC for renting out or Airbnb the next property I buy.
Investor · Pittsfield, MA · Member since 2019 · 88 posts · 49 votes
4y
Why the LLC? The reason I ask is, it sounds like you're getting all wrapped up in this LLC for this, that LLC for that, and just using that as a reason to not get started. I rent out two separate properties without an LLC and am now just getting ready to set one up for a third.
Make sure you have good liability insurance on top of what is offered through AirBnb, set good parameters for who you will allow to book your property, and then at the end of the year if you've got to pay a few extra bucks in taxes your first year, congratulations, you're in business.
Lender · VA · Member since 2021 · 12 posts · 2 votes
4y
Thanks. I have also considered not getting the LLC and just having insurance. Two of the reasons were I have to do a couple of renovations that will probably be 30k-50k and I wanted it all done thru the LLC since it's related to getting my home set up through Airbnb. The other was even though I have good credit I want to eventually have an LLC that has credit based off performance and one of the things they look at his how much money is the LLC making. I figured by having a stream of income coming into the holding company from the subsidiary it would help it get lines of credit.