Pay myself Salary will help qualify for 30 year loans? Advice please

[Greg P.]

Hello, my question involves having my company paying me a salary. Would it be smart to do this since if I can show two years income, then I can qualify for 30 year loans on rental properties I am planning on owning. The main goal is to qualify for 30 year conventional loans to purchase rentals, but I am not sure how to do this being a business owner. Please advise. Thanks much.

[J Scott]

If your company is organized as an LLC or an s-corporation, then any income earned just passes through to the owners of the LLC anyway. So, any LLC income will end up on your (and any partner's) personal tax returns, and will impact your personal income.

If your business is incorporated as a c-corporation, then you don't necessary have to take the income as salary, but don't get to claim it on your personal return. Though you can indicate the ownership on your balance sheet, and any retained earnings will show up as an asset.