Separate Prop. Mgmt LLC??

Hey Guys…

Suppose my investment LLC was the beneficary of some rental properties held in a land trust.

Would there be any benefit to starting a property management company separate from the investment company to manage them?

The investment company is in PA, the properties are in MD.



From a tax standpoint, no advantage, but you may actually increase your tax liability on your federal return by converting passive income to active income.

However, transferring the property management from the LLC management to a seperate entity may provide some level of additional protection. in the event that the manager does something stupid and gets sued, it’s better to have the management co (with no assets) sued rather than the entity that owns the property.

it’s a small difference, but I at least wanted to point it out.