House Hacking and Business Entities

[Whitney Clay]

Hi Everyone,

I am a new investor and recently purchased a 3 family property using a FHA 203k loan. The house is currently in the rehab process, and I am looking to set up my real estate business. I will be owner occupying one unit and renting the other 2, and plan to run property as a business. I plan to "pay myself rent", same as the other tenants and set up a business account to deposit funds, with future goals of purchasing more property.

Should I be setting up an LLC for this process? I have standard homeowners insurance, no umbrella policy yet as this is my first property, is that worth looking into at this stage? I just want to set things up to take full advantage of the tax benefits of the property ownership both as an investment and personal residence. I still work a W2 job (obviously) but do want to grow this into an actual full time business. I also want to make sure im covered from a liability standpoint and am not sure if a LLC is needed. I plan to self manage the property and am looking for any tips for running a landlording business.

Thanks!