Can I Trust Her With My Personal Info and Investment?

Question

I found a property manager who's really impressed me, since I've stayed at three of her properties already during a long travel nursing assignment in the city where I bought my first investment property. It was a slow remodel as I did most of it myself while working and communting out of state half of the week. I like the way she ran her properties and felt inspired by her ability to handle all of the situations I found myself in. I lost keys to my room and she came out to left me in (renting by the room). I caught something on fire in her kitchen (not my fault by the way someone had left plastic cookware in the oven and i assumed it was empty and turned on the preheat and went to my room to fold clothes). She was really cool about it too.

Flash forward to today - I want her to manage my property and rent it by the room on airbnb to traveling professionals...She's asking for my Airbnb login, pics of the house I wanna rent, Blink account info, door lock details, bank info, and the last four digits of my social security number. We've chatted a bit, but there's no official agreement between us yet. She seems to wanna work on trust, but I'm not too sure about that. I think there should be something official. I wanna protect my stuff and keep my personal info safe. Is there another way to give her what she needs to handle my property without making me feel exposed?

Patricia Steiner · Answer

You should never, ever, never give up control of your property to anyone. It is a common mistake of investors and it never turns out well.  And, what she is asking for would not be acceptable to me.  What do you actually want her to do?  "Managing" the property is too broad.  She does not need your bank information nor your SSN.  Define what it is you needed done and then don't allow your past experience to 'qualify' her for the job.  You may just find that you can self-manage the property just fine; my clients and I all self-manage our vacation rentals and wouldn't do it any other way.

And, so glad you relied on your instincts to take a pause here.  Protect yourself and your property first.

Jake Alexander · Answer

Much appreciated advice! I really needed to hear this. @Amanda Janes Thank you for the Airbnb clarification, things are making much more sense now

Amanda Janes · Answer

@Jake Alexander - if someone else is handling your rental, you’ll want to verify they are licensed in the State they’ll be managing.

ALL AGREEMENTS IN WRITING!

If they are managing within your own Airbnb login, it does not make sense that they need your SSN or bank info (assuming you will receive the 1099 and rental funds directly from Airbnb).

If they are managing within THEIR own Airbnb, it 100% makes sense why they’d ask for your SSN and bank info. They will need to be able to send you a 1099 for taxes and would need to know where to send the net rental funds to you.

I would highly suggest you look into establishing an LLC, obtaining an EIN for the LLC, and opening a bank for your LLC (rental) to see if this would be beneficial for you.

Eliott Elias · Answer

Your screening process is not sufficient, ask all the right questions. She should be a co-host on the airbnb app and not need your log in information to manage. Do not do business without contracts in place, things will always go wrong and if "trust" is what you are going off of you are in a bad position.

Michael Smythe · Answer

No offense, but you're looking at typical rookie mistakes!

How much research have you done here on BP with all the info available at your fingertips?

What do you think your chances of success will be if you don't INVEST some time in research?

Henry Lazerow · Answer

You do not ever give your bank info or ss number to a property manager unless its filling out a tax form.

Jake Alexander · Answer

Will do! Thanks again :)

Amanda Janes · Answer

@Jake Alexander - looks like you did your homework! I recommend following up with a CPA to talk about tax implications now and in the future (if you ever plan on selling).

Bill F. · Answer

I had a boss that used to say "If there is doubt, there is no doubt, don't do it."

I think that applies to your situation...

Jake Alexander · Answer

Would an LLC still be the way to go if the following is correct? It seems like I should've created this before I purchased and remodeled the houst. Might get complicated for taxes?

For an LLC to provide asset protection, the rental property should be owned by the LLC rather than held in your personal name. If the property remains in your name, the liability protection provided by the LLC may not be effective, as the property would not be considered a separate entity from your personal assets.

To transfer ownership of the property to your LLC, you'll typically need to do the following:

• Consult a real estate attorney or tax professional: Before transferring the property, it's crucial to discuss your plans with an attorney or tax professional who can help you understand the potential tax and legal implications of the transfer.
• Prepare a deed: To transfer the property, you'll need to prepare a deed (usually a quitclaim or warranty deed) that conveys the property from your personal name to the name of the LLC. Be sure to include the legal description of the property and the parcel number, if applicable.
• Sign and notarize the deed: Sign the deed in the presence of a notary public, who will notarize it to confirm your identity and ensure the document's validity.
• Record the deed: File the deed with the county recorder's office or the local government office responsible for maintaining property records in the county where the property is located.
• Inform your mortgage lender: If there's a mortgage on the property, notify your lender of the transfer, as some loans may have a "due-on-sale" clause that requires the loan to be paid in full when the property changes ownership.
• Update insurance policies: Contact your insurance provider to update the property insurance policy to reflect the LLC as the new owner.

Can I Trust Her With My Personal Info and Investment?

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