American expat buying single US residence - LLC or not?

[Haus Kauffmann]

Friends

I'm living and working outside the US, and will continue to do so for the foreseeable future.  Each year even after FEIE I have a modest tax liability to the US.  

SHORT TERM:

Buying 1 SFH, and as a form of personal support, will be renting to a relative for under market rate (i.e. will likely recognize net loss vs mortgate interest, depreciation, etc). This will happens for a few years.

LONG TERM/GOAL:

Whenever that term finishes, I'll probably rent it normally on the market.  If cashflow on that single house looks good, I might start adding properties and/or partnership, to start a small RE "venture".  Not a full-blown full-time thing. 

But for now it's just a single house, to help out someone personally, and get a bit of equity in the US.

QUESTION:

Given the above objective, does it make sense to buy this house under an LLC?  or just directly under my name?

I've done some research, including reading on this forum, and all answers converge to: "a single-member LLC makes absolutely no difference w.r.t. taxes". 

I get that, but given the long term vision, is there any other reason to form an LLC or not? Like, is there undue complications in filing and accounting and that makes it a pain? Or is it just paying a few hundred dollars (??) one time for incorporation, and then everything else is mechanically-identical?

If I lived in the US I would walk into a CPA office to ask these sorts of questions... but alas here we are.

thanks in advance

[David Gotsill]

@Haus Kauffmann - Welcome to BP.

There are some potential benefits to holding a property in an entity rather than in your personal name, even if there's no change in tax treatment.  As you are aware, there are costs and inconveniences as well.  A couple of items for your consideration (there are others, these are just my top pics):

Limitation of Liability. This is probably the main reason REIs hold property in an entity such as an LLC, which is to limit their personal liability. Oversimplified, as the owner of the LLC you're only liable for the amount you invested in the LLC. Why does this matter? For example, if your tenant is somehow injured on the property and the property owner is found liable for the injuries (e.g., landlord knew the stairs were unsafe but did not remedy, and they collapsed). If the owner is an LLC, the most the tenant can collect is the value of the LLC (typically the value of the property and your invested equity, minus the mortgage). If you personally own, the tenant could go after your personal home, your car, etc. As a personal owner you can effectively mitigate the risk with good insurance, but that comes at a cost (less cash flow) or by hiring a third party property manager to undertake some of the risks. Also, since you're abroad, not sure how easily tenant could go after you. As with most things, there are exceptions to the outline above, but this is the general idea.

Transfers. You can transfer ownership of the LLC, in full or in part, without going through title or having to pay any transfer taxes.

Good luck!