I recently closed on a quadruplex which is my first property and used an FHA loan. I created an LLC which I will transfer the property title into since I will be living on the property and another LLC as the property manager which the tenants will know me as. My question is in regards to managing the money and what is the most effective way to do so. My plan is to have tenants pay the property management company rent and then transfer the money over to the investment LLC. What I was wondering was, as the investment company should I "pay" the property management company which would increase my expenses. I was then curious on how that process would work if I did pay the property management company and then I paid myself as the employee would I then be able to take my earnings from being the property manager and reinvest them into the investment LLC. I understand how confusing that sounds.
To simplify, if you have an LLC for your property and another LLC as an property management company, do you pay yourself as you would a normal property manager?
Thanks in advance for any clarity you can provide!
Why not just collect rents as the LLC, set aside 30% for taxes, and be done with it?
If you were actually using a PM, it’d be a different story, but ultimately the income is coming back to you, so why add an extra step?
If you put the property into an LLC, you are going to lose all the benefits that come from being an owner occupant.
Thanks for the responses! That is kind of why I was wondering if the extra step was worth it since in Arizona I'd be the sole proprietor anyways. That makes sense.
I had not transferred title to the LLC yet and now probably will not, thanks for that reminder.