Rent Collection Advice

Chicago, Illinois
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Rent Collection Advice

Ali S.
Member since 2024 · 4 posts · 2 votes

Ні,

My mother and I own two units in an apartment building. She owns one under her personal name and I owned the other unit in my own name. How should I set up our agreement for who the landlord is? Right now we have it where the agreements shows she's the landlord of her property and I'm the landlord of mine but wondering if there was a way to make it under one individual as the landlord? (without doing an LLC). I also want to start doing rent collection via software and apps like Baselane or apartments.com so l'm trying to figure out where to have two separate accounts or can I do everything under one account?

Thank you in advanced!

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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
1y

@Ali S. You could set up a PM LLC that both of you would "Hire" to manage your tenants. Only one bank account needed, but you'd have to track income & expenses to do transfer and year-end accounting.

As @Nathan Gesner mentioned, not really worth it.

You two could also open a joint bank account for collecting rent and pay expenses, just be sure to track everything.

Do NOT do what @Paul De Luca stated about transferring title! This will trigger tax consequences! Confirm with a tax professional if you'd like.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    2y
    Quote from @Ali S.:

    The landlord name should match the actual owner name on the deed. If you want it to be a business name, then I recommend you set up an LLC, transfer ownership to the LLC, and then change your leases to match the new owner name.

    What is your reasoning? An LLC requires additional time, effort, and money to set up and maintain and juice probably isn't worth the squeeze.

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  • Paul De Luca
    Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
    2y
    Quote from @Ali S.:

    Ні,

    My mother and I own two units in an apartment building. She owns one under her personal name and I owned the other unit in my own name. How should I set up our agreement for who the landlord is? Right now we have it where the agreements shows she's the landlord of her property and I'm the landlord of mine but wondering if there was a way to make it under one individual as the landlord? (without doing an LLC). I also want to start doing rent collection via software and apps like Baselane or apartments.com so l'm trying to figure out where to have two separate accounts or can I do everything under one account?

    Thank you in advanced!


     Perhaps one of you could transfer title to the other? But if you both want to own/control the properties it probably makes more sense to have a legal entity. I recommend talking with an attorney to see what options make sense for you.

    Once you have the ownership/legal entity situation handled, you'll know how many accounts to have.

    0Reply
  • Gino BarbaroPro Member
    Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
    2y

    @Ali S.

    this is a question for an entity attorney, and one who handles leases. Each state has their own eviction laws, and I would want you to set up it right on the front end.

    From what you've written, whoever has the ownership shoudl be the landlord on the lease. Having the apartments in your personal names is another issue, hence the attorney

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    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    1y

    @Ali S. You could set up a PM LLC that both of you would "Hire" to manage your tenants. Only one bank account needed, but you'd have to track income & expenses to do transfer and year-end accounting.

    As @Nathan Gesner mentioned, not really worth it.

    You two could also open a joint bank account for collecting rent and pay expenses, just be sure to track everything.

    Do NOT do what @Paul De Luca stated about transferring title! This will trigger tax consequences! Confirm with a tax professional if you'd like.

    [email protected]248-209-6824
    Logical Property Management4.9460 Reviews
    WebsiteView Page
    2Reply
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