First Property - LLC for Property Management?

[Nicholas Morgan]

Hi everyone, 

I am closing on my first rental property in 3 weeks. I am purchasing it with a standard bank loan in my own name. There is an existing tenant who's been there for 8 years. Buying the property from a friend who says the tenant has been great. I plan to keep her. 

For tenant-facing items, I would prefer to not use my own name. For example, the lease would be between the tenant and [not my name]. I don't want to provide my personal residence in the lease either if I can help it. So I'm thinking about setting up an LLC so that the lease is between the LLC and the tenant. After thinking about it, the LLC would basically be the property management company...even tho it would consist of only me and my wife. Maybe just me, if that's simpler.

What are your thoughts on this? Is it not worth the hassle? Can I create the LLC and then just have all lease documentation refer to the LLC? I am in Ohio, FYI.

Thanks,

Nicholas

[Matt Ziegler]

We set up a LLC for our business when we first started. I think it makes sense to have all your accounting go through the business. The LLC you can do online with the secretary of state for cheap. Or you can use an attorney and make if more sophisticated. We started with the online $50.00 fee, and you need to set up articles of organization. We later used an attorney to review and update the structure, about $500.00

Get your EIN online, set up a bank account and do not co-mingle funds.

Folks will know you are the landlord, we made it clear to tenants that I was the handy man, my wife is the business manager(the brains of the operation). Good to have decent relationships with all the folks you interact with, not best buddies, but respectful, honest business relationship.

Treat it like a business from the start, best of luck.