LLC/Business to Manage my Rental Unit(s)

[Matt Z.]

(No replies in the Landlord/Tenant forum. Trying here instead.)

Hi BP Community,

Have a question regarding creating an LLC (or other form of business) to "manage" my rental unit (currently just one, may be 2 in the near future).

Background: Purchased 2-family house Jan. 2016. One Unit is First Floor, was already leased at time of purchased, and re-signed another year this summer. Other unit is combined 2nd/3rd floor, which I am owner-occupying. Lots of work and upgrades done, I'm extremely handy and do any and all work I can other than what requires a trade license. The property is in my name w/ mortgage, no LLC. No management company involved.

All the searching I've done about forming an LLC seems to be related to holding the property in an LLC. I understand the benefits of this, particularly if you own multiple properties, but that's not something I'm looking to pursue right now.

What I am interested in, is forming a property management company, ONLY to manage my own unit(s). (I do not hold any professional agent/broker/contractor licenses, which I believe would be required to provide property management services to others). The company would handle finances, conduct maintenance including purchasing materials or hiring outside contractors if needed, etc. I would owe this "company" a monthly fee for the service, as well being billed for any maintenance/repair/upgrade that the company conducts on the building.

Does this make sense/is this a standard practice? Hearing conflicting info, and would like to more definitively rule this in or out. It seems like this could help more clearly define the line between my personal finances, and the passive income & reinvestment in the property.