Can you rent your house to yourself? Let me explain.....

[Trey McGovern]

So I am in a weird situation. I have been actively investing in Real Estate for the last 6 months, but have had the idea for 3 years or so. 

Over the course of that time and during my research and thinking phase, I was toying with the idea of purchasing the current house I live in and using it as a rental, but I would be the tenant (short-term). 

So the situation stands where I am currently living in a great house that was purchased at the tail end of the 2008 market. Seller was desperate, so he decided to rent it out since the flip market was literally non-existent. I ended up in the house. 

Now, I want to purchase the property (I think its a great deal and in a great location for future appreciation), but I dont have any plans on living there for any more than 2-3 years from now. It is currently a rental property, I intend for it to be a rental, both by myself, and with future tenants. 

Can I legally purchase the house through my company, AND then create a lease between either myself or my wife to the holding company. This would be run totally like a business, all expenses handled through my company, rent checks made out to the company, etc.....

Is this something that is possible? Would I have to purchase as my Primary Residence and then resell to my company when I am ready to move and make the transformation? What would the obstacles be? 

[Account Closed]

A lot of great info on here from a wide range of people in different backgrounds. Kinda see where the potential idea of it being good is coming from and the standpoint behind it, but yeah it definitely seems counterproductive in some cases too where you could get cheaper financing in your name, not creating taxable income for your business, etc.

[Todd Swaggerty]

I belive a operating LLC or Corp can own real estate and rent it back to its members as part of compensation. If it's taxable to the member? I don't know .

If you owned it originally and then did this. Might show your cards.

[Barrett Bridgewater]

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[Christy Osakwe]

Quote from @Alvin Uy:

I've been doing something similar for years.  But i do it the other way around --The Primary house is under my personal name, my biz is the renter.   I have a dedicated office space at home, which I am renting out to my biz.  The rent amount is equivalent to my total monthly mortgage.  My internet bill and phone bill and other biz related expenses are also being paid by my biz.   Its a good write-off for my biz.   

I do have to report it as an additional income on my yearly tax returns, but I believe the rent isn't taxed as ordinary income (added bonus). This is fine because also helps me lower my DTI when applying for more loans for additional property acquisition.

 Hey Alvin,How do i go about renting my home to my business, can you show me the ropes?

[Zane Cress]

Your home can be owned by an LLC/business that you have a rental contract with. It is a tax strategy. I believe Tom Wheelright covers it in one of his books.