If it's not, you won't be able to legally rent out the unit and you'll be opening yourself up to huge liability if anything goes wrong. 

Our thought for this is, in the future it would help show income for lending purposes and possibly create a liability buffer.

So, what I do to satisfy both the financial benefits of utilizing leverage AND the psychological benefit of being debt free is I only have mortgage loans in which the property is the sole collateral with no liability to myself or my entities.  

LCC as a basic pass through and limited partnerships depending on equity arrangements and profit share of the parties add that extra level of flexibility and not needing to split potential individual partner costs or liabilities.  

Forming an LLC offers liability protection and clarifies ownership, but it’s usually best to establish it in the state where you're buying property to avoid tax complications. 

Therefore your focus should be spent understanding how to operate your business in a manner that avoids conflict and liability exposure because that's the best line of defense.

.-- If you're the lessee (and not the deed holder / owner): COH will require written consent by the owner to the use of their property as a        STR and to accept liability for taxes if the STR operator does not adequately remit Hotel Occupancy Taxes (HOT) as per local                         regulations. laws—a responsibility most owners will be reluctant to accept.-- Expect a grace period of two months once the new regulations are enacted into law.

You also asked if you should put your own house into an LLC.Yes, I think getting a Home Equity Line of Credit is a great way to get access to that equity and only use and pay for what you need.Putting your own house into an LLC may affect your ability to claim homestead taxes so you may not want to do that and may also affect your home insurance.However, putting your fix and flip into an LLC can reduce your liability exposure but make sure you also have the right insurance on the property while it is being worked on.

The current tax code provides special benefits in this situation.When the original owner passes away, the "basis" of the assets resets to the market value at the date of death.In the US, there is currently an estate tax exemption of approximately $13 million per person, which allows the basis to reset, and depreciation can start anew.This “step-up in basis” is particularly useful if the next generation wants to sell the asset.Since their basis is set at market value, if the property is sold at that value either at the date of death or within six months, there is no capital gain and no taxable event.There have been many examples where portfolios of fully depreciated real estate worth tens of millions of dollars have been passed down from one generation to the next, resulting in little to no tax liabilities for their heirs.Pretty cool, right?

I don't want to pick on you but you recently posted about utilizing land trusts and Wyoming LLC's to purchase real estate in Arkansas and also posted questions  suggesting you were unclear on how general liability coverage works/ is issued for a $170K purchase.