How do I structure my beach rental?

[Greg Moser]

We have a 2nd home at the beach we are looking to put on weekly / short term rental program with a local property mgmt firm.  The renters will contract with and pay rent to the management company (not to us).

I would like to protect the property and my personal assets from any legal risk from renters.

if we use an LLC to manage that risk…

1) Does our property need to be in an LLC or can it remain outside somehow

2) What role is the LLC business performing (is it also considered a property management business and thus require a real estate business license in some states)?

3) since we will use a local property mgmt firm for marketing / bookings / rent collection, What business is the LLc in and what income and expenses do you report as those of the LLC (vs what do you maintain personally)?

4) any Charlotte based resources that come recommended to help me structure this properly?

new to the space / appreciate any guidance

[Bill B.]

If you're net worth is over a $1M, get an umbrella policy. In what way do you possibly think your property could hurt someone without it also being at least partially your fault? You're going to get sued if the property hurts someone and the LLC won't help. PLUS you are 10x more likely to hurt someone personally (your own home, your dog, a car accident, etc etc) than the property is. In those cases the LLC also doesn't help.

If you have less than $500k in net worth just get 500/500 limits, if you fall in between $500k-$1m you make the call. Umbrella policies are very cheap. LLC's have no tax benefit, no privacy benefit, and virtually no liability protection. This debate has been had more than 100 times on BP. Not one BP member has ever come forward and said their LLC saved them. You're just adding costs and complexities especially involving refinancing. Congrats on getting started.