All Forum Posts by: Sarah Watson

@Ryan Meuer Hello neighbor! Thank you for replying. I can see the advantage of keeping it simple with an umbrella policy at the beginning, and worrying about LLCs later. I have a few phone calls scheduled this week to try to get more info/opinions. Setting up trust/holding co/llcs is definitely something I'd want to offload to an attorney - yuck. But we aren't looking to pay the big bucks for that right now either.

If you don't mind my asking, have you ever had a claim (umbrella insurance) related to your STRs? I imagine it's probably a low chance that something catastrophic happens. 

@Steve Redd Glad to hear your STR in Branson is going well so far - it seems like a slam dunk! Yes, We live about 3 hours from Branson. Here in Salem, we have only a dozen or less STRs on the market, so it has been quite difficult to have any info about rates, occupancy, etc. However, none are dog friendly and most are very small or very large, so we are hoping to hit in the middle with a 3bed/2ba that is dog friendly. *fingers crossed* We are also prepared to convert to medium-term rentals as there are several employers in the area that have contract workers in and out regularly.

Thank you for your well wishes! 

I will do my best to update when we decide how to move forward! How is your Branson STR going? My mom goes to Branson several times a year. It seems like it would be a great place for a STR!

Thank you for your response! Do you have a lawyer you would recommend who is familiar with the STR business side? I would be happy to pay for legal advice (and will likely need legal in the future), I just have not found someone yet who seems like they're giving personalized advice.

Hello! I've been reading BP for awhile now, but have not posted yet. My spouse and I are under contract on what will be our first investment property, a small single family home in small town in south central Missouri. We intend to renovate the house, and then open it as a STR this fall. I am confused as to how best to create our business structure - we do have other non-real estate assets, which I am reasonably concerned about protecting. It seems a STR is slightly higher risk than a regular LTR.

Should we - 

option 1: Do nothing - buy umbrella insurance and not open LLC/LLP. It would be easier to get a home equity loan/HELOC, which I think we will want to do in 6-12 months to scale up. Taxes would be simple as we could file as a qualified joint venture.

option 2: Open single-member LLC with myself as member and have LLC own the property. In that case, is all the income "mine"? This would make it harder to withdraw equity/acquire a HEL. I also already own a SMLLC as I am self-employed doing consulting work.

option 3: Open a multi-member LLC with us both as members and have the LLC own the property. My tax person says we would then be taxed as a partnership which is less favorable. (Missouri is not a community property state so cannot file as QJV under an LLC in Missouri)

option 4: Open a LLP or S-Corp... seems a bit much for one investment property, but what do I know.

What am I missing here? I'm feeling lost on how to protect our assets while still getting the tax benefits of a rental! Please send your thoughts and opinions and if you have a real estate lawyer in Missouri that you like, I'm all ears!

Thank you!