Manage a rental for my Mother?

Question

My Mom has a single family rental property where we both live in Oregon and I would like to help save her some money, starting this year, by managing her rental when I take over management of the 3 rentals my wife and I have. I am unsure if that is possible at all or if it depends on circumstances such as if I am compensated or if I have any ownership stake. I don't have ownership stake and I am happy to do it for little or no compensation.

I am hoping for concrete answers if anyone has them.

Thank you to anyone that takes the time to reply.

I am hoping for concrete answers if anyone has them.

Thank you to anyone that takes the time to reply.

Frank Chin · Answer

Depends on how you do it. I have a friend who's a realtor and uses a friend who manages his property. Manage Is a very vague and abused term, so he issues the payments calling it "janitorial services". Both payer and payee records the income and expense, and no license is required to be a janitor in this case, or as a messenger in my CPA's case.

Nicole Heasley Beitenman · Answer

My father manages my rentals without a license. I pay him 10%. I report my expenses and he reports his income on taxes. If it's illegal, no one has told us yet. He does not manage rentals for anyone else, and the properties are in my name without an LLC. I'm in Ohio.

Frank Chin · Answer

@Craig Thurman

Depends on how you do it. I helped out my mom in law and my dad in their later years. I am also aware of being paid and have issues with not being licensed. My wife is a licensed agent and I passed the licensing exam though I never went with a broker.

If I went all the way managing, including renting it out, signing leases, collecting rent checks, upkeep, repair and maintenance, paying the bills, taxes, insurance, I would do it via a master lease, preferably a NNN lease, and for all intents and purposes, you can act as a landlord, make money on the rents, and not have issues with licensing as you have an interest in the property. You can have the lease recorded in the public records.

My wife's involvement did not go to that extent with her mom. I have a CPA whose clients have the tenants send him the check, he books it and deposits it, and no need to get licensed as he explained, as I'm just a messenger. Technically, the checks were not payable to him. My brother collects the rent checks and bring it to the bank for my dad in the later years due to mobility problems. Neither my wife, my brother or I requested payments from mom and dad.

Courtney Duong · Answer

@Nicholas Cook

So if we have an LLC, and I am one of the member and we buy the house and put it in the LLC, can I manage the property without having a RE license?

Thanks.

Nathan Gesner · Answer

I don't know Oregon law but most states allow you to manage as an employee of the owner, meaning you are paid a salary and not commission. There's no restriction on how much you have to be paid so $100 a month or $1,000 a month wouldn't matter. There may be an allowance because of your blood relationship. CLICK HERE for one source that includes a link to the real estate agency where you can get it straight from the horse's mouth.

Nicholas Cook · Answer

If you are an owner or are managing the property without compensation that shouldn’t be a problem.

If you are managing the property and are being compensated that is considered professional real estate activity and you need a license.Now if the property was put into a legal entity and you worked for that legal entity, you could manage it and be paid, but that introduces nuances and other factors.

I hope this helps.

Manage a rental for my Mother?

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