Property under LLC or my name?

Question

Hi everyone,

Last year, I created an LLC, but I haven't purchased any properties yet.

I would like to buy a property close to where we live, in which my wife's parents will live for some years. After that, I would like to rent it out.

With that said, should I buy it under my name and then transfer it to the LLC when the time comes to rent it out, or should I buy it with the LLC immediately?

And, if I buy it with the LLC immediately, do my in-laws need to have a rental contract or can they just live in it?

Thank you for your help,

Andrea

John Underwood · Answer

You don't need an LLC for one mortgaged property.

Make sure to have correct insurance and maintain property.

Benjamin Aaker · Answer

Agreed with previous posts that you don't need the LLC to start. If you have plans to grow your investment business, I recommend getting it set up now. It's much easier to get it going when you purchase the property than to move it later. The LLC does give you some protections that you won't have putting it in your name. Mainly, the LLC prevents a loss from spilling over into your other investments or your personal finances in many cases (though not all). The reason many beginners don't do an LLC is because they don't have the down payment necessary. This is because you can't get an FHA loan for an LLC and thus have to put down around 20% for the loan. If this is your case, then your best option is to get an FHA loan on a small multifamily and house hack.

Bjorn Ahlblad · Answer

Either way have a lease if you are going to deal with relatives or anyone for that matter. Everything is easier and money is cheaper w/o the LLC. Lots of LL's have rentals in own name and others in LLC's-I do. Make sure you have the proper insurance and the tenants must have renter's ins IMO. All the best!

Property under LLC or my name?

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