Rental Property Investor · Lakeland, FL (lakeland) · Member since 2019 · 25 posts · 12 votes
We are purchasing our first rental property. I duplex on a FHA. With that said the loan is under my name but I do have an LLC. What is the best and most efficient way to collect rent? Should I accept it to my name or LLC as far as taxes go and for listing income to acquire my next property. Also would there be any advantage to have a website for payments to be made?
We are purchasing our first rental property. I duplex on a FHA. With that said the loan is under my name but I do have an LLC. What is the best and most efficient way to collect rent? Should I accept it to my name or LLC as far as taxes go and for listing income to acquire my next property. Also would there be any advantage to have a website for payments to be made?
Rubber checks are all too common so don't accept checks. I assume that you don't have an office so don't go to their properties in person to collect cash either. Online payments are nice. Direct deposit into your bank account is nice. As is money order. Note that money orders can actually bounce just like checks but it's a lot more uncommon.
We are purchasing our first rental property. I duplex on a FHA. With that said the loan is under my name but I do have an LLC. What is the best and most efficient way to collect rent? Should I accept it to my name or LLC as far as taxes go and for listing income to acquire my next property. Also would there be any advantage to have a website for payments to be made?
Rubber checks are all too common so don't accept checks. I assume that you don't have an office so don't go to their properties in person to collect cash either. Online payments are nice. Direct deposit into your bank account is nice. As is money order. Note that money orders can actually bounce just like checks but it's a lot more uncommon.
Blue Springs, MO · Member since 2015 · 481 posts · 313 votes
7y
Disclaimer: I only have one property so far. I am not affiliated with any sites mentioned.
I use Cozy.co for background checks and collecting rent. The tenants
have Cozy pull the money out of their checking account, and then Cozy
puts it in my bank account a few days later. This doesn't cost me anything. Cozy also offers a credit report and background check service that costs money. I wrote a detailed post
about it
here:
They did pay cash for the security deposit and first month's rent.
They asked about this ahead of time and I agreed; I printed up a
receipt and then dated and signed it once I had the cash in hand.
Attorney · Austin, TX · Member since 2014 · 1k+ posts · 932 votes
7y
Your LLC isn't providing any liability protection unless your property is held in the LLC. The LLC works like a liability box and only protects things that are inside of it. You would just be adding complexity by accepting rent checks through the LLC at this point, so it would just be easier to collect them in your own name until the LLC is set up properly.
The best strategy to utilize an LLC I have seen for investors in your situation is through a land trust. If you attempt a direct property transfer from your name into an LLC for the liability protection it will potentially trigger the due-on-sale clause. However, if you transfer the property into a land trust it does not trigger the same red flags because the land trust is considered an estate planning tool. After that you can assign the beneficiary of the land trust as the LLC, granting the property to liability protection of the LLC and avoiding issues with your lender.
As far as methods of collecting payment - I always work to collect payments online. It has proven the safest and most consistent form of payment to date in my own investments.
Hope this helps. Let me know if you have further questions.