Landlords : How do you own your personal/primary residence?

Question

This may be a stupid question, but I am curious to know. I have never seen nor heard where anybody talks about this. As a landlord, how do you own your personal/primary residence? Do you personally own it and pay the mortgage or does your business own it and you rent it from your business?

Adam Martin · Answer

I would think most of us own our own homes under our name like anyone else. I don’t think it would be tax efficient under a llc because we would have to pay taxes again on any payments to ourself and have to pay capital gains on all earnings on the sale. Sure the depreciation is nice on the front end but don’t forget about the recapture on the back.

Bill B. · Answer

Own In my own name, no mortgage as I don’t itemize personal expenses so the interest isn’t deductible. My first sale in 30 years of investing was my primary last year to a friends dad. Was a cash, tax free, no realtor deal that made sense. So I moved in to previous rental so I could capture the reduced taxes at sales time after 2-5 years of residency.

Aigo Pyles · Answer

I think majority of primary residences, default to buy the property in their own name.

Nathan Gesner · Answer

Own it in my own name. People put investments under an LLC to separate it from their personal property.

Lam N. · Answer

I know I'm suppose to own it in my name. But a few years ago I sold our primary residence and just conveniently moved into one of our rentals. Everything works out. Haven't had any problem. I don't know what the big deal is.

Stephanie P. · Answer

@Edward Prochilo

Interesting question.

We own our property in a trust. Our attorney told us it is a layer of insulation from liability suits.

Bjorn Ahlblad · Answer

We moved into one of our rentals a few years ago. It was ours personally and not in an LLC; it was never all that great as a rental but perfect as our primary!

David M. · Answer

@Edward Prochilo

Its rarely advisable to own your primary residence with a legal entity. Own it personally and qualify for the sec121 exclusion. If I recall correctly, if you self-rent, that triggers a clause in the tax code where the rent becomes active income and the expense stays passive. Since they are in different buckets they can't offset so its bad for your taxes, in short.

Landlords : How do you own your personal/primary residence?

Landlords : How do you own your personal/primary residence?

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