I have an existing multifamily (longterm rental) under an LLC worth about $450k. I am buying another about 25 mins away worth similar but planning to short term rental this one.
I know the normal pros and cons of mixing assets in an LLC and If all else equal, it would be a no brainer to create a new one. But the cost (filing taxes and bookkeeping for a LLC as a partnership with my wife) creates quite a headache and part of me feels I should be okay to put $1mil of real estate into one LLC even if it's two different properties. And then part of me thinks the short-term rental might be higher risk and I should keep the different types separate, regardless of overall value.
For those with a lot of years experience under their belt, what would you do? What will I look back in 10 years and wish I did? Keep the LLCs simple or incur the extra expense and headaches and keep on making new ones for the separation of liability and asset protection?
If it were me, I would have trust own holding LLC and HC own LLC. There are no Partnerships required. all the LLCs are SMLLCs.
This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
I work with a number of investor clients who own both short-term and long-term rentals, and I've seen both structures work effectively — either keeping everything under a single LLC or separating properties into multiple LLCs.
For those who prefer to streamline management, it's possible to handle multiple properties and LLCs within one QuickBooks Online subscription by using Locations to track each LLC and Classes to track individual properties.
As long as each LLC maintains its own bank and credit card accounts and transactions are categorized correctly, you can still produce accurate financials — including balance sheets that balance properly for each LLC. I have clients who use separate subscriptions for each LLC, and others who manage multiple LLCs within one subscription.
Some advisors recommend separate QBO subscriptions for every LLC — and that's fair — while others find that consolidating bookkeeping in one subscription reduces costs and administrative work without sacrificing compliance or financial clarity.
In general, a single LLC offers simplicity in bookkeeping, banking, and tax filing, but it also means your assets share the same liability exposure. Multiple LLCs can provide stronger separation of risk and asset protection, but they bring additional filings, fees, and bookkeeping complexity.
Ultimately, the best structure depends on your risk tolerance, portfolio strategy, and comfortwith administration — but from a bookkeeping standpoint, there are fully compliant ways to manage everything efficiently within one subscription if that’s the route you prefer.
At the end of the day, there’s no one-size-fits-all answer. What matters most is having clean, accurate books and a system that makes sense for how you operate and grow your portfolio.
@Ned Marz I've seen it done multiple ways. Some have an LLC and bank account for each property, but later find it too cumbersome and instead go with one LLC and bank account for their entire portfolio, ensuring bookkeeping and coding are done properly (at the unit / property level). Consult your attorney regarding asset protection, of course.
Rule of thumb, only put the number of assets in an LLC that you can afford to loose if you get sued.
If you have two assets that are worth 1mil combined and you are comfortable risking those assets then put both into one LLC . Although I don't have many investor buddies that would be good with losing a cool Mil!
Understanding the operational risks associated with your LTR and STR and knowing how to effectively manage both properties in a manner that deters liability while understanding how to utilize risk shifting strategies is a good starting point. Most investors are solely focused on preparing for the liability event to occur and believe they accomplish this through creating LLC's but proactive asset protection should be prioritized.
If it were me, I would have trust own holding LLC and HC own LLC. There are no Partnerships required. all the LLCs are SMLLCs.
This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
