Partnership Agreement/Structure for First Property Purchases

[Account Closed]

Hello - I’ve partnered up with a friend and we have purchased our first property together which we plan to use for short term rental purposes (Airbnb,Vrbo, etc). The mortgage for this property is under own names due to favorable interest rates and a lower down payment.

Additionally a bit of background info, before purchasing this property, we set up an LLC with a basic operating agreement. Initially we planned to purchase the property under the LLCs name, but ultimately elected not to do so as the interest rates would have been higher.

Would it be favorable to manage this property under the LLC or would a different organizational structure be more favorable? Currently we only have an operating agreement under the LLC. As the property is owned personally by us and not the LLC, the LLC would not protect us from legal liability. However, we believe it would be wise to use the LLC and a joint bank account under the LLC's name to track cash flow.

From a perspective of reporting taxes, would the LLC limit us? We would use a pass through structure, however, would we still be able to deduct interest and depreciation as the property is not owned by the LLC?

Going forward, we would plan to reinvest cash generated and grow our portfolio within the LLC.

Thanks for any help in advance!