Create an LLC for Managing My Properties?

[Mark J.]

{LONG POST WARNING}

I've researched this topic in a dozen other BP posts-- but I could use some additional input from the experiences and opinions of seasoned investors.

(And please, no "consult with an attorney" responses. I know that. However, I'm not going to pay $250 per hour for basic questions for which attorneys themselves have differing opinions. That's what the BP forums are for.)

Is there any value in creating an LLC for the sole purpose of managing the financial aspects of managing rental properties?

Here's my thinking:

1) Creating an LLC for property management (PM) would establish a solid business history for the LLC and make the LLC to be a better candidate for obtaining credit and financing within a few years if I wanted to later purchase or hold title to property under the LLC.

2) The LLC would have an EIN which would enable the LLC to open/maintain its own checking account which would receive/maintain rental income/deposit separate from my personal accounts. (I realize I could achieve the same result by simply creating another personal checking account to handle all rental-related transactions).

Do I save on sales tax if buying products/services with an EIN? (in FL)

From a tax standpoint, I understand that a single-member LLC has "pass through" taxation anyway, so any distributions from the LLC checking account to me, as the sole Member of the LLC, doesn't have any tax advantages, but only adds a layer of complexity.

3) If I wanted to deduct the "costs" of running the rental properties, would that be best done on my personal taxes by taking deductions for home office/saving travel expenses or do I need a separate business entity for that? If so, what kind? Or, are the potential deductions simply not worth the hassle?

4) The "To LLC or Not to LLC" topic is widely debated and covered in the BP forums, but, from a liability perspective, I imagine a PM LLC is worthless?

To manage my liability risk/exposure, I wanted to get your thoughts on my current plan:

#1 Be a fantastic, responsive, and pro-active landlord (who keeps excellent records).

#2 Conduct thorough and effective tenant screening.

#3 Create a strong lease which clearly outlines the expectations and responsibilities for the tenant and the landlord.

#3 Acquire plenty of insurance coverage and an additional umbrella liability coverage.

Many thanks in advance for your thoughts and responses!

Mark...