Collecting rent on property in own name

[Jeffery Drayton]

Hello Everyone,

I was wonder what type of structure is best for collecting rent on a mortgaged property that's under my personal name. I know about transferring it into an LLC but I don't want to trigger a "due on sale clause" so I would like to keep it under my name for now.

Should I apply for a sole proprietorship and have my tenant pay rent to a DBA to give a more professional/business impression or should I just have rent addressed to my personal name?

What do most of the landlords out here do? By the way I'm planning on building a portfolio in the future with an LLC, but for now I'm just trying to figure this situation out since I'll be self managing the property.



[Jeffrey Donis]

Hey @Jeffery Drayton I understand your fear. It's a common misconception among landlords that transferring a rental into an LLC will trigger a due on sale clause. However, the chances of this happening are so small, that it isn't something you should seriously worry about. Many lenders, including Fannie Mae, declared in 2016 that any owners who transfer property ownership into an LLC with loans obtained on or after June 1, 2016 must be allowed to by the lender without triggering the due on sale clause, as long as the owner of the property has majority interest in the LLC. Read here for more info: https://semiretiredmd.com/due-....