My wife and I are interested in buying our next rental property, particularly a SFH and we plan to rent by the room, and possibly go through Padsplit and rent by the room.I own a duplex from before our marriage which is rented out on both sides and she owns a townhouse from before we got married that were currently living in.

In several communities their ordinance says no more than 3 people unrealted by blood or marriage may occupy a residence. 

But he did take a loss that set his family back quite a bit, caused a lot of stress in his marriage, prevented them from being able to buy the new home his wife wanted with the right number of bedrooms for his kids, set him back years in saving for retirement and buying investment properties that could have made him money instead of losing money, etc.

Keep the marriage, dump the shed. 

Recent discussions in Bloomberg and the Yale Law Journal shed light on the challenges posed by traditional zoning regulations and offer insights into potential reforms that could benefit co-living arrangements.Zoning Laws and the Definition of FamilyTraditional zoning laws often define "family" in narrow terms, typically limiting residential occupancy to individuals related by blood, marriage, or adoption.

They are like marriages: easy to get into but very painful to get out of.

However my understanding is that exceptions can be made if unexpected life events happen such as job relocation, eminent domain, marriage, divorce, changes to family size, deployment, imprisonment, bankruptcy etc. 

Hi Moustafa, congratulations to you and your wife on your marriage and for thinking ahead about financial independence!

Quote from @Havital Miltz: Normally you would set the LLC in the state where the property is.You have no tax benefits for setting up an LLC, it is more a protection from lawsuits and going after your personal assets, however not a guarantee....As a husband and wife you do not need to set up a partnership - IRS has special considerations for married couples for self employment, you could also apply that for a rental...Hope that helpsA joint venture is available to any 2 people co-owning real estate for investment purpose as tenant in common  under Proc. 2002-22 (unrelated to marriage) but it can't be owned in an LLC together. 

IE rent to a tenant for >12 mo,  dating before marriage, no late payments then with a down paymetn (long story here)  I'll sell on either a contract for deed (typically mobile homes on land) or a note and mortgage (regular nicer houses).