Updated about 3 years ago on . Most recent reply
First rental advice needed: STR!
Hello! I have a few questions about purchasing an STR. It would be our first rental property.
1) should we form an LLC first? Or can we do that after the purchase?
2) STR insurance: I'm guessing we should purchase a policy in addition to that of Airbnb (or whatever service we list it on). Any recommendations for companies?
3) we plan to purchase the property with a conventional 30 year loan. Right now we have both of our names on the loan app. I remember learning something about each person can have up to 10 mortgages to their name. Should we try and just have one of us on the loan, so we’d be able to get more mortgages? (“We” is me and my husband) I have absolutely zero legal or financial concerns that would affect that choice. Just wondering if we should leave both names or do one for the sake of future expansion.
I ordered the “short term rental, long term wealth” book which I plan to binge read as soon as it comes 🤣 but just looking for some help in the meantime! Thank you!!
Most Popular Reply
1. You don't have to do it first, you can always do it later.
2. Steadily insurance is cheaper than proper.
3. If you can do just one person that is better. Ask your loan officer about how this will affect your DTI on the next one.
4. (Bonus) When you go to file taxes in the spring, get a draft of your taxes from your CPA and send it to your lender. Ask them if you are taking the correct deductions and if the way they are being filed is in line with your goals. My CPA was doing their job of saving me as much in taxes as possible and my lender was helping me qualify for as many properties in the future as possible. Those two things can be conflicting in STR taxes so have that 3-way dialogue BEFORE you file.