Should I start a property management company?

[Shaun Hunt]

I have purchased six properties. They have been assigned to my LLC, Hunt Family Properties LLC.

I do my own property management for those properties.

Would it make a difference if I started a property management company and hired myself to manage my own properties? Would it be a wasted effort if I did?

As of now, we pay our kids to collect the rent each month. They are paid through a DBA we started.

Also, unrelated, how do I keep my profile picture from rotating 90 degrees. It will be ok one day, then flipped the next.

Thanks!

[Ashish Acharya]

@Shaun Hunt Starting a property management company to manage your own properties could offer some tax advantages, but there are important factors to consider. By forming a property management company, you could deduct business expenses like office supplies, software, and possibly a home office, which you wouldn’t otherwise be able to claim.

You could also potentially pay yourself a salary through the company, which could create retirement plan opportunities, such as contributing to a solo 401(k) or SEP IRA. However, this approach might add complexity, such as additional tax filings, self-employment taxes, and administrative costs. To see significant tax saving, the management income has to be significant so.

The bottom line is that PM would be for more legal reasons and not for tax reasons.

*This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.