What should i name my rental property LLC expenses list [No Fluff]

Last updated : Sept 6, 2022

How do you come up with a property name?

1. Are there any geographical features nearby?
2. Any historical significance to your building?
3. What's nearby?
4. Any flora or fauna local to your region?
5. Does your home or building have something unique about it?
6. Are there any words that rhyme with your original descriptor?

What entity is best for rental property?

The Limited Liability Company (known as LLC) is the best entity for most real estate and mortgage investors who "buy and hold" their investments. When you buy and hold real estate it is considered a capital asset.

How do I name my real estate LLC?

Keep the name short, simple, and to the point with 1 to 3 words at the most. Stick to basic names such as the rental property street address, the neighborhood, or the part of town in which the home is located.

What are the advantages of putting a rental property in an LLC?

The biggest benefit of creating an LLC for your rental property is that it can insulate you from personal liability. Yes, you may have liability insurance, but if someone is seriously injured on your property, they can sue you personally for medical expenses and damages above and beyond the limits of your policy.

Can you live in LLC rental property?

An LLC is a business entity that has its own rights, and buying and owning real estate are indeed among them. So the answer is yes, you can in fact live in a house that is owned by your LLC — as long as your operating agreement allows it.

How do I structure a bank account for a rental property?

There are three steps involved in this accounting system: Step 1: Set up a separate checking and savings account per property; Step 2: Make sure all income and expenses produced by your rental property flow through its checking/savings account that you set up in step one above; Step 3: Reconcile at year end.

Why is LLC better than S Corp for real estate?

Generally, an LLC is typically better for rental properties than an S corp. However, both offer: Liability protection for the owners. The chance to avoid double taxation by being taxed as a partnership.

What are some good LLC names?

• The Moving Guys.
• Sister's Restaurant.
• Ruggiero Brothers Oil.
• Angela's Bridal.
• The Tree Fellas.
• The Coffee Girl.
• The Building People, LLC.
• The Wine Guys.

What are examples of LLC names?

• ABC Limited Liability Company.
• ABC Limited Liability Co.
• ABC Limited.
• ABC L.L.C.
• ABC LLC.
• ABC Ltd.

Should I name my LLC after myself?

Sometimes it makes sense to name your LLC after yourself if you want to grow your personal brand, but in some cases using your personal name can limit your business' growth or even confuse customers.

How much can I write off on a rental property?

1. Rental property owners can deduct the costs of owning, maintaining, and operating the property.
2. Most residential rental property is depreciated at a rate of 3.636% per year for 27.5 years—what the IRS considers the property's "useful life."1.
3. Only the value of the buildings can be depreciated.

What are the disadvantages of an LLC?

• Cost: An LLC usually costs more to form and maintain than a sole proprietorship or general partnership. States charge an initial formation fee.
• Transferable ownership. Ownership in an LLC is often harder to transfer than with a corporation.

Can my LLC buy my house?

You may wonder, "Can an LLC buy a house?" The short answer: Yes. You may want to explore the idea of buying a house with an LLC to enable your business to own property or to have your LLC make your next real estate purchase.

Can my business pay my mortgage?

Home Office. The employer can pay for a portion of an employee's mortgage if he has a home office. However, the IRS allows a deduction only for a home office based on the square footage used exclusively for business.

Can I buy a house with my EIN number?

Yes. You can use your EIN to obtain a loan, as long as it is for business funding. You cannot use this number to take out a personal loan, as an EIN is only designed for business-oriented transactions.

What is the Augusta rule?

What is the Augusta Rule? The Augusta Rule, known to the IRS as Section 280A, allows homeowners to rent out their home for up to 14 days per year without needing to report the rental income on their individual tax return.

Should I have a separate bank account for a rental property?

In one word: yes! Keeping your personal and rental property bank accounts separate is our #1 piece of advice for real estate investors and landlords. Below we take a deeper dive into why this one basic step is so central to keeping better books and running a better real estate business.

Do I need an accountant if I have a rental property?

Hiring a specialist property accountant can provide huge advantages to potential landlords and people who already have a property portfolio. In order to make investments successful one, good financial information and up to date advice is vital. This is where property accountants can really help.

How do you record rental expenses?

Every month must be listed under the original monthly rental expense, regardless of what was actually paid that month. It is listed in the expense account. Offsetting rent payments – reduction of cost or inflation of cost – is listed in the deferred rent asset or liability account.

What is the best tax classification for an LLC?

The best tax classification for an LLC depends on whether you want your business profits to be taxed at your personal income tax rate, or at the corporate tax rate. If you'd prefer personal tax rates, you can classify it as a disregarded entity or as a partnership. Otherwise, you can classify it as a corporation.

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all right guys hey in this video we're going to talk about how to name your limited liability company all right let's get started okay so if you're setting up a limited liability company coming up with the name is something that seems to trip a lot of people up i can't tell you how many times i've been on the phone with someone and i say hey now i need a name or two for your limited liability company and it's just silence i don't know what to call it i gotta talk to my spouse about this i have to get back to you hey names are not that important but there's some things you should consider when naming it but for sure don't get hung up on it because things can happen i mean i had this one client years ago was setting up 17 limited liability companies for this person in oregon there were two physicians and they couldn't agree on the names and so they went months without setting up the llc's because of names and then this one of the the wife is involved in a car accident she wasn't at fault she actually got hit from behind and her car was plowed into the other three cars in front of her that had already collided but she had the nicest car she had the s-class mercedes so everyone sued her and at that point in time they were scrambling trying to get their properties transferred and i told them hey it's too late everything could have been protected but you couldn't decide on some names so when it comes to setting up your llc if you're going to hold if it's not a business like okay per se that associated with you do not use your name that is the number one mistake that i see people make they put their own name down on their llc clint coon's limited liability company now why the hell would i want to do do that right i mean unless i want to brand myself and this company and myself being associated with it if it's going to hold assets your name should not be in there at all i mean part of my strategy is about using anonymity well you just went and blew it for yourself by adding your name to the llc now the other thing to consider too is that if you come up with a name for example if you decided hey i want to uh we're going to call this evergreen investing all right people get attached to names they find one name and then they want to go out there and continue to use that same name so you're going to create multiple llc's evergreen investing what is called e i llc here's one then they come on the evergreen investing one llc evergreen investing ii llc and so forth down the line and they're creating multiple llc's all with the same name now first off okay think of it this way if you're trying to build anonymity right even though your name's not associated with these entities what is associated with all of these entities that one wyoming holding company that we have down here right here this wyoming llc so you've just basically told someone hey all of these entities are really owned by the same guy there's not a lot of research that has to go into this because i'm going to make that assumption whoever's created in this way that's still the same investor so you want to minimize that to the do not use this type of naming convention not only is i think giving away too much information to tell someone hey e1 or ei12345 they're all associated together it's confusing right who's it confusing to well number one it's confusing to your bookkeeper it's confusing to your attorney i've had discussions with people before and i think i'm talking about evergreen one we have to be talking about evergreen four because he didn't say evergreen four he just said you know evergreen the fourth one might what what i get all confused about which entity we're supposed to be dealing with so it makes it hard to communicate with other people not only is it other people you'll get it screwed up and i'm telling you this from first hand experience i've been there i did this at one point in time and i will never do it again because of that because of the confusion associated with that so when naming your llc try to stay away from this type of stuff so that brings us then to setting up for the real estate then what do we actually call it if we're not going to be using this type of structure like this well what i will tell you is you can pick any name you want but first you have to figure out what you're going to be using if you're going to be using a land truss associated with it then watch my video on naming your land trust because that's key here you want to make sure those sync up what i'll typically tell people is name the llc after the property address okay so if you already have the property that makes it extremely easy to do so you would set up your llc if the property was located on 732 broadway all right then i would set this llc up with 732 broadway llc that's what i would use i know which property is held there um another thing that sometimes i'll put into my llc's as well is the state for example if it was i own property in multiple different states and so when i'm setting them up so when i'm just looking down the line of my entities i'll put a designation on here for example 732 broadway or 732 broadway say nc llc why do i put nc because that tells me that is my north carolina llcs and so every time i see nc i have the address and that nc designation tell me which state it's in so if you invest in multiple states and you're setting up multiple limited liability companies this is an easy way for you to remember which property is located in which state right because as you buy more you tend to forget i i do i can't keep track of them all so i use uh the nc designation on there or whatever state that you're investing in as a rule of thumb now the problem that comes up is for individuals who uh are setting up llcs in advance so so this is a common thing that you should do when you're investing in real estate if you know that you're going to be buying property and you you know the state that you want to be investing in maybe set up one or two llc's and have them on the shelf and so you don't own the property yet but you're going to be investing in in a certain state and so you can't use the property address because you haven't acquired it yet and the other thing is is you wouldn't want to set up an llc right in advance of making an offer on a particular property for example let's say i was going to make an offer on 732 broadway so i hop online let's you know some states such as wyoming you can create the entity just like that right so i could have 732 broadway in five minutes ready to go so then i make the offer for 732 broadway i've seen this come up before that it throws off realtors um and sellers of property because they start wondering why do you have an llc set up with the exact same name of my property and they think something fishy is going on so so that you got to kind of be leery of coming up with the name before you actually have this property under contract so don't make the offer in the name of that llc because i've seen it make cause problems for people so it brings me to this point when you're going to if you don't own the property yet think about it in term

Thanks for your comment Bee Colletti, have a nice day.
- Romana Smaldone, Staff Member

welcome back in this video i'm answering the question should i put my rental property or real estate into an llc i'll be looking at rental property llc tax benefits and implications and looking at the pros and cons of using an llc for your real estate or rental property but first if you're new here my name's amanda and you're watching the business finance coach where i simplify all the technicalities of money and business and investing to help you succeed because i truly believe that the world needs your business and you deserve to make your dreams and ideas come to life and these aspects of our civilized society should not hold you back they should empower you to move forward and on that note i have a free crash course for you all about real estate and how to master your accounting and taxes and it includes a free template so after you finish this video if you need this foundational education and real estate be sure to get free access right now while this crash course is free for you check out the links or in the description below now let's jump into should you form an llc for your real estate or rental property and what are the pros and cons to using an llc for a rental so first the question is should i put a rental property real estate into an llc and i actually find that more often than not people are asking this question because you want to know about the tax benefits you know if you take these extra steps for an llc what are the tax benefits so first of all there's no right or wrong way here you can use an llc you cannot use an llc okay i just want to be clear about that it's not like one is far better than the other there are pros and cons and so that's what we're covering in this video number two there's no difference in taxes okay there's zero difference in tax whether you use an llc or you do not this is a big area where people mistake differences in process and requirements for differences in taxes so next before we get into the pros and cons of llc or not llc another fundamental concept to just be aware of is that when we talk about putting a rental property or real estate into an llc we're looking at the same foundational concepts as considering a business using an llc or not because renting a property or using it for business is what the irs calls trade or business and as long as profit motive is there it applies just the same now of course the pros and cons i'm going to go over are specific to rental properties but i just want you to understand that it's a business activity renting a property and so when if you see anything out there about choosing an llc or understanding llc's it applies to rental properties the same way and you might say but what if i'm renting a property and i have a loss well you still own the property because the payments of rent are going into your principle right and so the activity itself is is for profit you're not doing it for charity so with that let's get started into the pros and cons and this is really the meat of understanding your options with using an llc so a pro is that an llc is what's called a separate business entity it's formed under state legal law and what that means having a separate business the whole point of separate business is this concept called limited liability you might have heard of it it's hard to talk about the llc and not hear about limited liability because it's the primary feature of separate businesses so what is limited liability it's that you as an owner personally aren't responsible for what happens in the llc instead the llc is just like you are responsible for your actions if you break the law you can be sued you can be fined well now the llc has an activity renting a real estate property and it's responsible for its actions it can be sued it can be fined and therefore there's separation between what's owned in the llc and what you own personally and so it's a called protection to keep these liabilities separate so let's take a look at my cheat sheet from my choosing the best type of business to form course and a few other courses i have about entities so every business has legal and tax implications or sides and so you can see legal is on the left and tax is on the other side so every business has these two sides to it now if you see over on your left side it says is this business a separate entity or not the first option the sole proprietor isn't separate so if you personally go out and purchase a home and start renting it you have a for profit activity that you're doing it's just under you personally with all of the other types below including llc there's a separate entity created now on the tax side you can see that it's almost the same except for the single member llc when the llc was created it was what's called a disregarded entity on the tax side meaning the irs just never looks at it doesn't acknowledge it whoever owns the llc is who the irs sees and so the single member llc you can see it has a nickname called the best of both worlds because with our not separate business sole proprietor on the tax side on the right you can see it says separate business tax return and so the not separate business doesn't have to file a business tax return all of the other types of businesses do and that's a bad thing because they're more complicated they're more expensive more goes into it so it's considered a a you know more work not no benefit to it remember there's no tax benefit to using one of these entities it's just extra steps so the single member llc is called the best of both worlds because we get the limited liability on the legal side but we don't have to file a separate business return on the tax side now a multi-member llc does have to file a separate business return and that's a lot more cumbersome and so it's really something to consider if you're considering you know doing a multi-member llc because you think that's what you need to do be sure to understand that there's no tax benefit you want to really have a strategic reason why you would do a multi-member llc with other people you don't want to just be getting your daughter or getting your spouse to do it with you because you know you thought that that gives you a more legitimate business or tax benefits it's quite the opposite okay so nothing wrong with using the multi-member llc but you want to know why you're doing it you know you're going in with an investor you're doing the work the investors putting the money this is how you guys are combining as owners you just want to be clear about that otherwise this limited liability concept that's the pro of using an llc that really is the reason to do it but how relevant is this if people go around and like i said at the start there's no right or wrong here people use the llc people don't use the llc well if this limited liability is so so important and such a benefit why wouldn't i say everyone should use an llc well quite frankly if it it does create a lot more steps using the llc um for some people this is overwhelming and and prevents you from moving forward and of course i'm gonna go into the cons in a moment so i'll save um some aspects on

Thanks Hoyt your participation is very much appreciated
- Romana Smaldone

About the author

Romana Smaldone

I've studied pest control at Point Loma Nazarene University in San Diego and I am an expert in paleoecology. I usually feel okay. My previous job was real estate lawyer I held this position for 11 years, I love talking about amateur astronomy and taxidermy. Huge fan of Kirsten Dunst I practice field hockey and collect artist trading cards.