Having an S-Corp gives you the tools needed to control how much of the profits are subject to payroll tax.

Check out the ERISA act of 1974 and if you are a sophisticated investor, you can create a single member LLC, create a Trust and open your own plan that you have control.

And, it could be negotiated who pays what almsot everywhere that I know of.So, you can see that having a good contract that is not only compliant with rules, regulations and applicable laws but that local custom also comes into play to have a good business contract.Chances are, anything you buy off a shelf as a contract will not meet the business needs of a more sophisticated RE investor or that addresses good business practice in a particular area of investing.Another issue, discussing contracts in general or commenting on any aspect is not the practice of law but it can get to that point when one begins advising on requirements to a specific transaction.

The only down side is you have to put someone on payroll to be there during the day to fill out rental contracts and answer questions.  

If it is a pass through entity then you can give yourself a pay roll either way. 

@James Leake Hi James - I assume they also have someone on payroll who manages the administration of all those properties, right?

Those and other questions may present trade-offs between income tax, payroll tax, and investment objectives.

As a result, the relatively small % population increases in California outpace job creation and housing supply, with low growth in payrolls.

So pro forma $.Same can be said about turnover costs, R&M, pay roll, and many other line items :)

We bought multiple properties and think that we are sophisticated player but it happens to us all the time (especially for attractively priced deals) even though we know the game.