Transfer title of properties to LLC in PA
Hi Everyone, been a long time reader of BP, but this is my first post. I currently have 5 SFHs in the Pittsburgh area that I rent. These are all currently in my name, i manage the properties myself and have no due on sale clauses on the mortgages i have on some of the properties.
After I purchased the 5th this past fall i started to think about how to more effectively run the properties. I wanted to start to treat this more like the business it actually is. Before my personal and 'rental' income/expenses were very co-mingled. I only had one bank account for everything.
I formed an LLC, got a separate bank account created and started to use those accounts for all transactions in relation to the rental business. I also did a number of things around getting better leases created, purchasing a property management solution, formalizing a business plan, etc.
Where i am at now is trying to determine if I should move the properties title into the LLC. I have an umbrella insurance policy right now to provide some liability protection. I am concerned long term about liability protection. I have spent hours and hours reading all the posts on BP about this topic. I believe i know all the PROs and CONs of moving into an LLC.
I have also discussed with a local PA attorney who recommended i move them into an LLC.
My last hold up is that in Pittsburgh i would need to pay real estate transfer tax on the properties. Each of these homes has a assessed value between 50-75k. I would cost me around 15k to transfer them into the LLC. If i did not have to pay the transfer tax i would have already executed the transfer. I am just held up on having to shell out the money when i would much rater use that to purchase another property.
I would be curious to hear everyone's thoughts on what they would do in this situation. I know this comes down to my situation and my risk tolerance, but knowing that I will still manage the properties, still puts some risk into my personal assets if I ever had a claim filed against the properties. Is it even worth considering moving them into the LLC since i will be managing the properties myself?
Thanks
Phil