Spring, TX · Member since 2016 · 39 posts · 8 votes
Hey BPers,
Have another question with regards to leasing my first SFH. I'm wondering if it's necessary to establish a management LLC to serve as a middle entity between myself and the tenant. The property I'm planning to rent is already in an LLC I own. I have heard that some people establish a separate LLC to manage the asset that is in another LLC they own. I'm wondering what the benefit of doing so would be and if it's really necessary. I know most of us aren't attorneys but any input you can provide on the topic would be greatly appreciated.
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
8y
You don't need to create a new LLC. The benefits would be additional liability protection and additional deductions for management income. You pay the mgmt LLC $100/month, then deduct expenses from that company. Much more tax and compliance work, but benefits with scale.