Using our primary residence as a rental in the next 6 months.

[Wade Karguth]

Hello BP,

We are looking at using our primary residence as a form of cashflow in the next 6 months, and are looking for some opinions on a couple of items.

We were following Dave Ramsey's teachings for years, and the house is currently paid off. We like the thought of keeping it debt free to try and maximize our cashflow.  We are putting some money into a few renovations and making it a little nicer place for our future tenants, and to hopefully reduce problems we can for see from dealing with the property for 5 years now. 

My wife and I have some other rentals with a partner and we're familiar with being landlords, as well as small business owners. We know there are benefits to having an LLC for our personal protection and for tax purposes.

My concerns have to do with our primary residence, and if we should create an LLC to place it in, or leave it in our names and what hurdles, or pitfalls you could see in both instances.

Should we place it in an LLC? Again just for my wife and myself to control. Not part of the partnership.

Would we have any tax implications if we transferred the property to the LLC? We think it is only worth about 60k at the moment.

Any concerns that you may be aware of that may still be an unknown issue to us?

Thanks for checking it out.