Switching Rental Property from Personal to LLC?

[Patrick Rafferty]

Seeking help/advice for what the title suggest. Reading and seeing a lot of pros & cons for moving my rental property to an LLC, getting stuck with what I should do.

For context, I purchased a townhome in my personal name in 2020, began renting it in 2021 and it has been rented out since. Property is located in NJ. Purchased at $166k, present comps at $285k

I am on the market for my next property, which is why I'm looking at forming an LLC for the original rental. I was advised that for owning a single property, isn't cost effective to have it in an LLC.

- Worried that, should I move to an LLC, my mortgage may be called to be paid in full by my company

- Does this disqualify me from a 1031 in the future?

- Am I able to do a mortgage assumption from personal to the LLC to avoid the balance being called and effectively keep the interest rate? (My mortgage does allow it)

- Does transferring the property bring any capital gains into effect due to the rise in value?

- Overall tax structure being more complicated

There's plenty more "What if's" out there, but I believe these are my main concerns. 4 years in and still a rookie.

Any advice and knowledge from personal experience is welcome. Leaning towards the LLC, just want to make sure I do it right. Thank you