All Forum Posts by: Daniel Hyman

Welcome to the BP forums @Alex Brown.

Check the blue "Tax Pros" above and filter accordingly.

Congratulations!

Make sure to plan for the added rental income/ordinary expenses on your tax return. 

And make sure to plan for the additional depreciation as well!

For bookkeeping it depends on your portfolio.

A portfolio of 1-3 SFR's can likely be a DIY project.

For 4+ you may want to consider outsourcing.

For tax prep, you'll likely want to have a pro handle it regardless of the portfolio size.

Check out the STR forum where you'll find some great information and will see questions and answers from those who have successfully scaled STR businesses.

I have seen it both ways. This is where it pays to consult with a real estate attorney.

While an S-corp may offer tax savings, its possible that those savings would be eaten up by the the admin costs.

So many variables here that it really pays to consult with a tax pro.

Forming an LLC for your rental property can offer liability protection, but no real tax benefit. Financing might be a challenge.

I would recommend consulting with a attorney, loan officer, and CPA to discuss your specific situation and determine the best course of action. 

Also, keep in mind that if you do form an LLC, you'll want to keep these under your EIN, not your SSN.

1. Bank Account
2. Credit Card
3. Title
4. Loan
5. Bookkeeping Ledger

Here's a good folder setup.

• Bank Statements
• Credit Card Statements
• Property Management Statements
• Mortgage Statements
• STR Platform Statements
• Invoices
• Receipts
• Closing Documents (Purchase/Refi/Sale)
• Leases
• Check & Deposit Images
• Vendor Contracts
• W-9’s & 1099’s

Keep track of 3 buckets.

1) Owner occupied portion - potential deductions for schedule A

2) Tenant occupied portion - potential deductions for schedule E

3) Jointly occupied portion - likely prorated for both schedules.

There are nuances to this, so I recommend looking for a tax pro who can coach you on this. 

Great post. 

Regarding the payout inefficiencies, I remember the nightmare that some folks were experiencing with state unemployment benefits during Covid. I can envision that the numbers on these luxury homes would lead to to a long lag time...but hopefully I'm wrong.