Self directed: active or passive management of rentals

[Pete Torrez]

Hi all, although not new to investing (over 200+ properties since 2000) I am new to self directed retirement plan investing. It is my understanding when investing in rental properties, both long term and vacation rentals, the properties should not be managed by me personally as that would make it an active investment and subject to income tax versus a passive investment managed via a management company. If i am correct on that, how distant does the management company need to be? Could I utilize a management company owned by a family member? Could I open a management company under a new LLC, charge market rates and pay income taxes on any income produced by that company?

I love the BP family and resources, only wish it was around when I first started.

Thank you all.

Pete