VA Home Loan Financing and Renting

[Account Closed]

I am familiar with the requirement if I use the VA home loan that I have to occupy at least 25% of the property. However, is anyone familiar with if I wanted to convert a basement into a living area and rent it out how this can be accomplished as a "business" versus me just trying to make side money? I am looking to purchase a house or townhouse in the Denver area (probably Lakewood or Arvada region). There is a good demand in the area for rentals and I have been doing as much research as possible to find reasonable rental price. Obviously, the perk of using the VA home loan is the initial 0% down but I wanted to get some advice on how to accomplish turning it into a legit business and not get hammered when it comes to taxes or legalities. Any advice would be appreciated!

[Bill S.]

@Account Closed so I think you may be a bit confused about a rental and a business. Perhaps you listened to someone selling a product about LLCs and they said you needed to hire them so you could write off a bunch of expenses by forming a "business" for your rental. While that whole game is possible it's not really practical for one unit. You can use the search feature and read the 1,000s of posts on the topic. More people get hung up in the paralysis of the complexity making it a formal "business" when buying the property, fixing it and renting it is a much better plan. That is hard enough to pull off without trying to jump through all the hoops for form LLCs etc. Better to do it all in your name than not do it at all. Not doing it has a much greater costs than any savings or security offered by some "business" setup. Certainly operate the rental with a business mindset. Get permits, use leases and follow the formalities required to do it right. You then have a business, it's just in your name. That's just my 2 cents.