Hello! I have 2 questions regarding LLC's, and I can't find the answer on Google or BP.
1) I rent the spare bedrooms out of my personal residence. For this reason, is it advantageous to put my house into an LLC? Do the pros/cons differ since I run a business out of my home?
2) If I were to place my home into an LLC, would that debt still factor into my DTI ratio?
No tax advantage for an LLC in your case.
There could be some legal reason, but I doubt so. The whole premise of legal protection is to separate assets, but here your assets are one indivisible property. This one is for attorneys, and I'm not one.
Thank you @Michael Plaks !
I agree that there aren't any tax reasons to do so. To answer your second question, Yes - the debt will still be a factor in your DTI ratio.
The only reason you might want to do this is if you're renting to strangers. Then you can be the property manager instead of the owner of the property. The checks can go to the LLC and you can 'check with the owner' in the case of any conflict.
I rent only to friends, so I don't do this, but I've heard it mentioned as a property management strategy.
Thanks for the help! If it won't take the house out of my DTI, then I probably won't bother.
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