All Forum Posts by: Leonardo Morantes Gomez

you can put it into an LLC if you have a recent FNMA mortgage and you form a single member LLC. Check your mortgage docs and with your servicer.

You'll also need to look into:

- Impact on your property taxes: some areas have different millage rates for owner-occupied vs non-owner occupied properties.

- Impact on your home insurance: you'll need a landlord policy and confirmation of what will happen if vacant for more than 30 days.

You should also consider impact of selling. You're probably eligible to sell and pay no capital gains on up to $250k profit if you file single, $500l if married filing jointly. Where could you invest that money for a better return when you include adjustment for tax-free?

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Thanks Michael,

I was actually thinking about the same issue with the capital gain. My house has appreciated nearly 180k over the last 6 years. Since I’m buying a new primary home, would I lose that tax exemption? Should I then sell this house and use the funds to pay for my new home and use the cash that’s left into buying rental property? 
Thanks for the great comment and advice.

If you do move it to an LLC it would be for asset protection purposes, however to other's comments - the 1 LLC won't be sufficient. You'll want to look at a trust as well to get an extra layer of protection. I would speak with Jackson Law or another real estate law firm to give you advice. Jackson can do a free 30 minute call with you and you can book online.

If you do go the LLC route, you'll want to make sure you keep all of your finances separate as well.

Do you plan to do a long term rental and self manage? Or are you going to use a Property Manager? Have you considered a furnished corporate (mid-term) rental for increased cash flow?