Collecting Rent on LLC Name or not

General Landlording & Rental Properties
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Collecting Rent on LLC Name or not

Lakshay G.
Small Business Owner · Fallston, MD · Member since 2014 · 145 posts · 20 votes

Hello there, I am new to buy and hold investing and closing my first property very soon. The house is on my name (not on LLC). My concern is that I don't want a tenant to know my full name and my details that I actually own the house, I would like to act as a property manager instead. Yes I'll be using a P O Box address where they will send a payment (I'll be lucky if they can pay online). In other words, I don't want to use my name on the lease, I'd rather form a LLC and use the LLC name instead of mine. Maryland is not the cheapest when it comes to LLC fees. Is this my fear due to being new. So coming to two questions now. Should I create a LLC that a tenant will write checks to and will that really do anything? Second, if the tenant asks me if I own the house, can I say it's owned by a person who doesn't choose to disclose but the LLC is managing it? Or should I suck it up, mention since day 1 that I am the landlord and not care what they think.

Thank you in advance. 

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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
8y

@Lakshay G. In MD you as an individual can register a DBA... it's called a Tradename and it can be created with a simple form + payment. You'll need to renew it every 5 years.

As others have said, since the real property is owned by you personally, and that information is public record, your tenants will be able to figure out easily who owns the property they are living in. They can also go and search tradenames on SDAT and figure out who owns the DBA they are paying rent to.

Low bar but some anonymity. Zero liability protection.

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  • Lakshay G.
    OP
    Small Business Owner · Fallston, MD · Member since 2014 · 145 posts · 20 votes
    8y

    Originally posted by @Brad E.:

    @Lakshay G.

    I have just done exactly what you have described. You can 'quit claim deed' the property to the LLC. My closing attorneys handled that for me (I think for free) about a month after close date. I would just let the attorney know that is what you want to do prior to or at the closing table.

    In terms of ownership I am the property manager for reasons mentioned here and elsewhere.  

    The one thing I discovered and have still not figured out how to solve is snail mail.

    Marketing mail is being sent to both units of the property I purchased, addressed to my name, at the property address.  So that pretty much kills the anonymity play.

    I spoke with the mail carrier and she said there is not really a way to stop it.  You can request mail forwarding but that will only forward first class mail, which most of the marketing garbage is not.  

    I was hoping to find the equivalent of a 'do not call' list for mail but it doesn't seem there is anything like that.  

    If somebody has tips on a solution for this I would love to hear.

     Very Interesting. I already closed today. I opted in to get higher liability coverage for now. I'd be interested to see other input regarding mail issue for sure.

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  • Account Closed
    Specialist · Gaithersburg, MD · Member since 2016 · 20 posts · 17 votes
    8y

    Once you sign on the dotted line and the deed is recorded it is a matter of public record. Your changing to an LLC does not change that fact as the articles of incorporation are public record and easily accessed, too. LLCs do offer you a measure of protection from claims but are not absolutely bullet proof. Proper management, proper maintenance, proper operating procedures, and being accountable with sufficient liability plus acts & omissions insurance will help you sleep at night.

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