Legally, W-2 process and collecting rent, Fort Lauderdale

[John R Behrns]

Good afternoon BP,

2018 I purchased my first property… Two bedroom two bath in sunny South Florida. I've spent the last two years fixing it up and getting it rental ready. I've come up with excuses in this process: it's nice to come home, you will rent it, it takes time, you need more education on being a landlord... I potentially have a great tenant lined up, stable job, stable income and it would be wife, husband and mother-in-law. I understand the need to still do background checks and have everybody sign the lease and rental agreement but I am having trouble wrapping my head around filing taxes, write offs, do I need an LLC, do I pay myself... how do I make this legit legal so I use the right systems moving forward.

I appreciate everybody’s time and what a great opportunity to have all this knowledge in one room :) 

Thanks,

John 

[Bradley Sriro]

@John R Behrns take a deep breath LOL... you are really overthinking this. Overthinking can sometimes be your worst enemy. If you don't have an LLC, then you would simply count the rents collected as income on your tax return. If you open an LLC, you would in essence do the same thing since it is a pass through entity. You do not need an LLC though... it is your preference.

Since you have had the property for 2 years now without a tenant, I would get the tenant in place so you can stop paying unnecessary holding costs. You are losing money every month that it is not rented. There are plenty of books out there that can guide you in terms of allowable write offs. Figure this out after you get the tenant in place though. You are suffering from analysis paralysis right now and it is costing you money.

Check out: J.K. Lasser's Small Business Taxes 2020 or 2021

Another good book that is really good when it comes to tax strategies is "What Your CPA Isn't Telling You" by Mark J. Kohler

Finally, you can't go wrong with the Bigger Pockets book by Heather and Brandon Turner "Managing Rental Properties"

My advice is to stop overthinking and just get it done. The rest will fall into place and you can learn as you go. All the best!