Change deed from LLC to personal when moving into a rental?

Question

We recently got our primary home under contract to sell and will be moving into one of our rental properties that is owned by one of our real estate L.L.C.’s.  We plan to live in this home for several years.  I was wondering what everyone’s thoughts were as far as whether or not I need to change the deed over to our names rather than our entities.  We plan to rent this property out again once we are done living in it in around 7-9 years.  The property will be owned outright and has a value of $100,000.  It was a rental property for only around 9 months.  Any insight would be great, thanks!

Steve Vaughan · Answer

Ok phew.  Sorry to assume you just quitclaimed it like most everyone else seems to be doing.

If you never plan to sell it as a primary and take advantage of the tax-free gain, I don't see a problem keeping it as an LLC.  Some states have great homestead exemptions. If yours is one, you may consider that.  Those protections may only be available to people.  You may also get a better insurance rate as a natural person owner.

If you do 'change it over' do it with a warranty deed vs quitclaim.  Good luck and congrats on having a timeline to having  that home paid off!  I haven't regretted paying one off yet.

Jerrad Shepherd · Answer

@Steve Vaughan thanks for the response!

My entity bought the property and it is still in its name.  So I have never owned the property personally.

Steve Vaughan · Answer

in general I would and do own primary's personally.  You want to be able to sell tax free for 1.  Even if you plan to rent it out, I would want the option if value blew up and awh schucks. We were being sophisticated so now we don't get the pref tax treatment every other homeowner on the planet does.

What do you mean by changed over? You quitclaimed it to your LLC?  Is your title insurance still intact? Hazard insurance?  Did you get a normal mortgage in your name, then 'change it over'?

All this over-sophistication really bothers me.  I'd own in my own name, especially with a mortgage.  If you've already quitclaimed it a time or 2, your title chain is bunked anyway.  Talk to a pro.