My husband is also launching his own business, and together we’re building multiple income streams with the goal of achieving financial freedom.

He helped us optimize depreciation as well as the STR exemption on ours.Cannot say our STR experience has been pleasant at all (our airbnb is in PHX). 

@Joe Villeneuve - ah I see, basically you are optimizing for ROE - return on equity.

For now, you’re still benefiting by offsetting passive income and building up losses (carry forward) to potentially apply more broadly once REP status is achieved.

It's never fun to spend that money, but you have created a bad situation by what is in essence  subletting part of the house without the utilities being optimized for that split. 

For optimal asset protection, having an individual LLC for each property will provide the most comprehensive separation and protection for the properties, in particular in limiting each properties exposure to the liabilities of other properties.

We went through that process when we started transitioning our properties too, and I know it can feel like a lot at first.A few resources I found helpful:Bizee offers some step-by-step guides, though I’d recommend customizing based on your state’s specific requirements.If you're planning to grow your portfolio, connecting with a real estate-savvy CPA and attorney early on is huge, they can help structure things to protect your assets and optimize your tax situation.If you ever want to bounce ideas around or hear how we did it (and what I wish I knew earlier), feel free to reach out.

One thing to keep in mind is to avoid over-spending on the units that are not for your personal occupancy if you are looking to optimize profits.  

If this is an owner occupied loan, you might achieve this on an FHA and MAYBE a conventional loan if you shorten the loan term to 15 - 10 year loan. 

Instead, is there a way to optimize your STR income?