How to structure my first Short term rental

Question

Hello everyone, I am a novice investor out of Yuma Arizona￼. I have decided to turn my primary home into an Airbnb.The home is under my personal name and at this point I have the home set to standards to begin to rent out on the platform but I am confused on the proper way of running the business. Should I set up A business entity beforehand? ￼￼￼Also I am seeking anyone in area including Phoenix Arizona who is currently running a successful short term rental business who I can ask question as problems come up. I am willing to pay for any time and knowledge this may take up ￼.

Bethany Moklebust · Answer

Hi Ezekiel,

I don't have any experience (yet), but I am in Yuma also and would like to follow this thread to see what others say.

Daniel Hyman · Answer

@Ezekiel Oropeza

You would still report the income and expenses regardless of in an LLC or not.

Whether or not you should go the LLC route would probably best be discussed with an attorney and tax advisor.

Ezekiel Oropeza · Answer

@Sean Morrison thank you for Replying to the thread . If I Choose￼ to run the business￼￼ under my personal Social Security would the only drawback be  the liability of potentially getting sued? And of course my income when it comes to taxes?

Sean Morrison · Answer

Disclaimer: I am an attorney, but I am not your attorney. This is not legal advice, just friendly information.

If I understand correctly, you'll still be living in the home, right? Be careful with creating a business entity here. In order to move your property to an LLC, you would need to deed the property to the LLC, which gets into due-on-sale issues with the mortgage company (see the many threads on that issue). As an LLC, you could lose any homestead exemptions for property taxes. Insurance rates (both homeowners and flood insurance) could go up significantly. But if you want to do it because you have significant liability concerns, then talk to an attorney first.

Jaeseok An · Answer

I've talked to a few Airbnb hosts from Arizona, and can ask questions next time calling them. What are the things you'd like to ask? Is it about their occupancy rates and revenue? or regulations?

How to structure my first Short term rental

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