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Looking to invest in rental prop: LLC-pros/cons? Higher condo fees pros/cons?

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What are the considerations (tax benefits, additional costs, etc) for setting up an LLC for investment properties (rentals in Maryland) ?
The condo fees have gone higher given the market conditions. Are there any tax advantages of paying the condo fee, can it be written off? Thanks.

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June 26 - Washington

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John Crowe, "jdcaustin"
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John Crowe, "jdcaustin"

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Find a good CPA versed in real estate. The way I like to view an LLC is it vehicle to take one down a path to long-term wealth, not short-term income. As an investor, wealth is more important than income. CPA will have many more tips to limit your tax footprint.

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July 07

Sean Malo, "seanmalo"
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Sean Malo, "seanmalo"

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L.L.C.'s are great in protecting you. Financing is more difficult, your company needs credit just like you do. Also a lot of banks will not sell a foreclousure to the llc or will give homebuyers 1st shot at the property. So you could miss some deals. Another idea is to purchase as a individual and then transfer it to you llc after the fact. Talk to your attorney in your local area about pros & cons of that.

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July 07

Riya Inv LLC
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Riya Inv LLC

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Y're right, the liability protection seems like the biggest advantage, while there are some additional expenses, though not significant. Some of the condo fees are as high as $600 and taken it all as a deduction would be great (but I need to double check, as it will really help me determine if the property is worth pursuing). Thanks Marilyn.

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July 03

Marilyn Bell, "MarilynBellSells"
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Marilyn Bell, "MarilynBellSells"

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My husband uses an LLC for his investment properties. The main reason we do it that way is liability. He's from a prominent wealthy family, and people love to sue for a piece of that pie. That's a pro for us.

With the LLC he usually has to pay cash for a property. It's much harder to finance. That's a con for us.

We have to pay to have the LLC (granted only a few hundred dollars a year) and pay for separate tax returns to be filed. Another con.

All the rest is really the same. It's a misconception that there are tax advantages to having an LLC. You can file a Schedule E with your 1040 and "write off" your condo fees.

I'm not an attorney or tax advisor, this is just my personal experience.

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July 02

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Question I am looking for Real Estate investors to do wholesales with. I appreciate any contacts out there.

Question Looking to invest in rental prop: LLC-pros/cons? Higher condo fees pros/cons?

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Question I am looking for Real Estate investors to do wholesales with. I appreciate any contacts out there.

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Guide What is Gross Rent Multiplier?

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Guide What Is a Second Home?

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