Leverage rental portfolio to add to wife's income

[Madhu Kumar]

I am thinking to leverage my rental portfolio to make income for my wife so that in couple of years she can get qualified for rental loans by herself. She is a stay at home mom taking care of our two kids. I do at 9-5 job and also make 6 figures plus gross rental income. Currently the properties are all on my name and loans as well.

I am thinking to add her name on the title of few existing and new properties and let her claim some/all income on the properties while filing tax returns. Just like how partners would do on a deal. 

Do you think, this makes sense?

We file taxes jointly by the way.

If there is a better way, please let me know.

Thank you!

[Jaysen Medhurst]

@Madhu Kumar, I would put the properties under one or more LLCs that you and your wife are the members of. Ideally, she then qualifies as a RE professional in the future. That would allow you to apply all of your passive losses (mostly depreciation) against your W2 income.

If your properties are profitable, I don't see why you would have any trouble qualifying for future loans. If you scale up to 5+ unit properties, you'll be looking at commercial loans, which are more concerned with profitability of the actual deal.