Forming an LLC for our Short Term Rental

[Shannon Vistisen]

Hello Everyone, 

I'm looking for some information around forming an LLC for our Airbnb property.

Can we legally do it? 

What are the benefits?
What are the requirements?
What has been your experience if you have one?

Thank you!

[Megan Templeton]

Hi there! @Shannon Vistisen

Congrats on your first investment property. I do recommend holding the STR in an LLC - an LLC with anonymity if possible. The important pieces to consider when setting up an LLC is the cost to form the LLC, the state requirements for compliance, the charging order protections in the state, and lastly where the property is located (although this is not definitive). The LLC formation process involves completing paperwork and filing with the secretary of state, paying a formation fee, and creating an operating agreement. The cost varies by state. The process can take between 1-6 weeks depending on the state, attorney you are working with, and complexity of the operating agreement. For attorneys, The benefits of using an LLC are that it removes liability from your personally and provides protection in the event of a lawsuit because the only asset(s) at risk would be those held by the LLC. There are also tax benefits and lending benefits as an LLC provides new opportunities for write offs, financing, etc. I would recommend researching real estate investor specific attorneys and those that operate in multiple states so that as you grow and purchase properties in other states, your attorney team will be able to accommodate your needs. I would check out Royal Legal Solutions. They are a one stop shop operating in all 50 states catering to investors.

Thanks,

-Megan