I plan to acquire a rental property in 15 days.
I have a few questions, as i start learning more about the team that i need to surround with.
Is it better to have an LLC or create a land realty trust. I have a trust that i already created for the family.
Should i have the LLC tied to the rental property. Who else should i be speaking to.
Real estate attorney, CPA etc.
If you can direct me to previous posts, i will be glad to go back and review them.
Newbie to real estate investing.
Insurance is more important than a trust OR LLC. Insurance combined with an LLC or trust is even better. I use a holding company LLC or other asset protecting entity, insurance and a strong lease agreement … all setup through an attorney licensed in my state.
As an investor, you will have to secure your assets and you can do this with LLC. prepare your self for mandatory reports that need to be filed yearly when you are part of an LLC.
So, LLC is good or Corporation which one do you suggest?
LLC can be taxed different, “Corporation” implies “C Corp” which is not good for a starter!
I won’t give you legal advice, but I would personally do S Corp or LLC. Preferably an LLC until you have some money to throw at a CPA in your area!
If anyone has any experience with rentals using a property management company. It seems as if property management companies are pretty expensive, but i’m not sure what the cost/benefit ratio would be.
GLBC -property management companies can have their benefits. Most average around 10% of NOI. However, make sure you get a trustworthy, quality company, and don’t go completely passive. Always good to stay in touch and let them know you are there.
Also, you can negotiate with prop mgmt companies. They need you business as much as you may/may not need theirs.
10% they may charge, but perhaps negotiate 5% gteed, and 2-5% additional if they perform to your expectations (I.E. maintaining low occupancy rates, or a set NOI, etc.) - this will ensure they work hard for you, cause half their pay is determined by their performance vs getting 10% no matter what they do or how well they do it.