Rental Property Investor · Mankato, MN · Member since 2015 · 47 posts · 13 votes
Hey BP Members,
I am sure this has been discussed here but i am relatively new to the site.
I would like to start a discussion on the pros and cons of starting a property management company simply to handle my own inventory. 20 units all within 1 city. All of them are held in various LLCs, and range from single family to fourplex.
Are there tax advantages compared to just having my tenants pay the LLC the property is in?
Do you just form the company as an LLC, or is there a better structure?
What advice do you have?
I guess my questions focus around advantages to just having the management company for my own properties, and not about growing a new profitable company that handles other peoples properties.
Rental Property Investor · Michigan City, IN · Member since 2015 · 530 posts · 741 votes
10y
@Daniel Sprague Unfortunately I cannot give you an answer on the tax liabilities pros and cons but I would like to follow this topic to see what you hear.
Someone please correct me if I am wrong, but from what I understand from research I have done you would simply set it up as an LLC. Because you are managing your own properties you would not need a broker to be involved in the business, if you managed others properties you would. I believe all your LLC's would roll up come tax time though so I don't see where there would be a benefit. Please check my understanding of how the taxes are rolled up.
The reason I say I have done research is I have put together a business model on how I may want to scale my business. It involved structuring a multi LLC strategy with one acting as the property management company. The only reason I wanted to do this was because some of the LLC's would have been partnerships and I would have wanted to flow property management fees to myself through my property management company. This would have made the paperwork easier and agreements clear with each partnership I was involved with. Currently I only own a 4 unit as the sole member of my LLC so I have not dug out the details of this question yet due to not needing to know the specifics just yet.