Hello, fist time using this forum so bear with me! I own a home in Summerville SC, and have orders to move to Hawaii (tough life). I plan on renting my current home out as an investment. I've had roommates in my home since I've moved in (all with contracts) and have also done quite a bit of Airbnb. So I have at least some experience, however, I know it's a completely different game actually moving out and then another game moving out of state from my rental. So far I have started a rental contract on ezlandlords and have made sure to get a state specific contract. I am currently in the process of finding tenants and also a good well trusted handyman. Ideally I'm just looking for any and all advice that anyone has to give on the matter. But here's all the questions I have and that are running through my mind:
-Should I create my own LLC and transfer the property? (Currently scheduled to meet with a CPA for consultation)
-Should I hire a company for a handyman? Or should I try to find an individual or private contractor that might be more personable?
-I will require the tenant to have and prove rental insurance, but what other types of insurance do I need? What's the best way to protect myself and assets?
-Finally, what information am I missing or do people commonly miss?
I do not expect a response to all these questions so an answer to just any one of them would be fine. I am eager to learn and have a couple months to plan and prepare (Ideally I would like the home rented in March). I've been looking at the forums and doing my research but just wanted to see what people thought of my situation. Thanks in advance for any advice! You guys rock!
I would not bother with an LLC unless you have a lot of net worth to protect or are super concerned about it. Things are easier without one.
A smaller handyman is likely going to be more responsive, but will also run into problems if something happens to incapacitate them. Finding good help int his area is our biggest challenge.
Other than insurance on the property, you could explore umbrella coverage if you are overly concerned about it. I personally don't have a lot of faith in insurance paying up and have a higher risk tolerance so I don't extra insure. Of course there are horror stories.
Other things to think about - do your utility companies have programs to keep landlords informed if tenants fall behind. Plans in place to cover future vacancies and routine property inspections? Give your contact info to the neighbors and let them tattle on issues; the sooner you know the better. Have you established criteria for both what you will communicate to applicants as requirements and rules (pets? pit bulls? prior evictions? criminal) and how you will rate applicants as you start accepting applications?
Nice that you have time to pre-plan, good luck!
We have all our properties in LLC's, this comes down to personal preference, good move talking to your CPA.
I would call around and find a good handyman/contractor, in our area they are one in the same. Ask for references and call them.
As far as getting tenants we use a property management company. We manage the properties ourselves but pay a flat fee to the company to find a new tenant, this system has worked well for us.
Should I create my own LLC and transfer the property? (Currently scheduled to meet with a CPA for consultation)
- You are not required to create an LLC. Asset protection is important; many investors either use an LLC or umbrella insurance policy for asset protection. You should look into both as options and speak to an attorney
Should I hire a company for a handyman? Or should I try to find an individual or private contractor that might be more personable?
- Managing the property in SC by yourself from Hawaii might be difficult. South Carolina is 5 hours ahead of Hawaii. What if the tenant has an issue at 9AM; you will be sleeping in Hawaii. For this reason - I would recommend reaching out to a Management company to manage the property.
I will require the tenant to have and prove rental insurance, but what other types of insurance do I need? What's the best way to protect myself and assets?
- You should look into an umbrella insurance policy.
Finally, what information am I missing or do people commonly miss?
- You will be required to file a federal income tax return, Hawaii Resident income tax return and a south carolina non-resident tax return.