You’re lucky that you’re here! Why? Because you need to list your property for rent, and in the article below I will show you the absolute BEST WAY to do it.

If you follow my simple steps below, you’ll likely get your property rented faster, and for more money.

I’ve been a landlord for 15 years, and I’ve been in e-commerce for 5 years. This gives me a special insight on what needs to be in an online listing for a rental property.

Remember, being a landlord is a business, even if you only have 1 property. And with any business, small decisions can have a large impact on your profit line.

Imagine if you have a sloppy online rental listing. Dark Pictures at weird angles, bad text description, boring title, no instructions. You will get very few leads, and very bad leads. Which means you get a bad tenant who ultimately may not care for your property and will not pay rent.

Contrast that bleak scenario to a listing with a catchy title, intriguing description, bright & attractive photos, and instructions with a button to “Click to Apply”. You will do so much better in attracting the best leads.

In the text below, you will find (click to jump to topic):

1. Step 1 – Choose the Right Listing Platform
2. Step 2 – Create a Stellar Rental Listing (Title, Description, & Photos)
3. Step 3 – Publish Your Listing and Promote it
4. FAQ’s about Listing Your Rental Property
5. Laws Regarding Listing Your Rental Property
6. Top 5 Free Rental Listing Sites (Table)
7. Listing Your Rental Property During COVID-19 Conornavirus

So let’s start at the beginning: Decide where, meaning what website, to list your rental property on.

Step 1 – Choose the Right Listing Website Platform

Here’s the current situation with rental listing websites. Lots of the rental listing websites have gotten together and decided to share listings with each other. So if you put your listing on one site, it will show up on certain other sites. They call this “syndication”.

What you want to do is put your listing on a site that will syndicate your listing to as many sites as possible. And they must be sites that make sense for you. For example, if you have a single family home that needs a typical 1-year lease, you probably wouldn’t put it on a vacation rental site like Airbnb, because that is for short-term rentals.

I personally like a site called Avail. Because when you create your rental listing on Avail, it will then show up on the following major sites:

• Zillow
• Truly
• HotPads
• Apartments.com
• Apartment List
• Walkscore
• PadMapper
• Zumper
• Realtor.com
• DoorSteps

Avail’s online software tools are also easy to use with the strategies I give you below when you create your listing.

Also with Avail, once your leads start coming in, all the leads will go into your Avail account, where you can then ask them pre-screening questions, schedule showings, and request rental applications, credit reports, etc. It’s a “one-stop shop” for getting your property leased. And the applicant (not you) pays for the screening! Sign up for that here on Avail..

And to make your life even easier, Avail offers additional tools that help you manage the manage the property, such as digitally signing a lease, collecting rent, etc.

You can learn more about Avail by signing up for a Free Account here.

Okay, now let’s make an awesome listing that will attract some great rent-paying tenants!

Step 2 – Create a Stellar Rental Listing that Stands Out

Notice that I didn’t write, “Create a Rental Listing”. I said a “Stellar Rental Listing that Stands Out”. That is because your listing is going to be better than all the boring listings. And don’t fret; It really only takes a tiny bit more effort to have a great listing vs. a boring listing. And it’s well worth it.

Your stellar listing is going to have the following 5 elements, and I’m going to take you through each one:

Title that Hooks the Prospective Tenant

Just like the Title of a Book, or the subject line in an email that you want to be opened, the Title of a Rental Listing needs to get the prospective tenant to click on it.

With a rental listing title, you want to achieve 2 goals:

1. Deliver the Relevant info about your property
2. Convey that you are a serious, professional landlord

The relevant information to deliver is easy. It’s simply:

• Rent Amount
• #Bedrooms/#Bathrooms
• Type of Space (House, Condo, Apartment, etc. + Neighborhood)
• Key Feature

Let’s do an example:

“$1,550 – 3 Bed / 2 Bath – House in Plano with Spacious Backyard”

Notice there is not any crazy sales language such as “AMAZING RENTAL!!!”. The crazy car salesman-like language conveys that you are an amateur.

To convey that you are a professional landlord that knows what they are doing, just keep the Title short and sweet.

The “Key Feature” at the end is really your only opportunity to get creative in the title, and it should only be 2-3 words.

Here’s another example of a good Rental Listing Title:

“$950 – 2 Bed / 1 Bath – Condo in Garland – Newly Renovated”

It quickly delivers what the reader needs to know, and throws in the best key feature, that it was just renovated.

Here is a Checklist for things to NOT have in your rental listing title:

• Misspelled Words – Bad spelling conveys you are not professional.
• Bad Grammar – Also conveys you are not professional.
• ALL CAPS – No need to use all Caps. It annoys people.
• Phone Number – Does not go in Title.
• Property Address – Does not go in Title.
• Calls to Action – Things like “CALL NOW BEFORE IT’S GONE!” do not belong in the title. This won’t help you at all. It just looks bad.

Now just for fun, I’m going to quiz you: Tell me what is wrong with this Craigslist Rental Listing Title:

Your answers should be:

• It is in ALL CAPS (very annoying)
• It is using 3 Exclamation Points !!! (are they trying to yell at us?)
• Does not say how many bathrooms (rental leads need to know this)
• Does not list a Key Feature (missed opportunity to attract leads).

Now you practice writing a Title. Write out the title to your property. You just plug in that key information, and think of the Best Feature of the property. If you can’t think of a best feature, then what about nearby attractions? Is there a park or shopping center nearby? If so, your key feature could be “Park Nearby”.

Clear Property Description

Once a prospective tenant clicks on your title, they will probably look at the pictures next, which we will discuss below. If they like the pictures, they will “invest” a few more seconds reading your property description.

Now these days, people are lazy and don’t like to read. And that makes your job here a little easier. So all you have to do is write 3-4 sentences that elaborate on your title. Don’t worry, there is a formula for this too, and I will share it with you now.

When you complete the formula below, try to add in a few descriptive adjectives to excite the reader. Here is the formula for writing a property description:

{Key Feature:}{#Beds, #Baths, Type of Space, Neighborhood.}{What is Nearby}{Another Feature of Property}{Pets, Rent Amount, Smoking, Application Fee, Contact Info}.

Let’s do one together now using the formula:

“Spacious Backyard: Light and Bright 4 Bedroom 3 Bathroom House in Central Plano. Close to elementary school, and walking distance to multiple parks and trails. Large Patio in Backyard, New Stainless Appliances in Kitchen. Pet-Friendly, $1550/month, No Smoking, $35 Application Fee, Call Mary at 555-555-5555.”

Easy! The only creative work on your end is thinking about what’s in the area (parks, nightlife, stores, etc.) and a few features about the property. You can do this! Now you try!

There are a few things that you MUST AVOID in your Rental Listing Description. Otherwise you may get sued: Do not EVER mention familial status, sex, disability, religion, color, race, or national origin in your listing. Sounds easy to avoid, but even something as innocent as “looking for a nice family with kids to live here” or “great for a single person” is a violation of the Fair Housing Act.

And my last rule for the rental listing description: No ALL CAPS OR EXCLAMATION POINTS!!! It makes your property listing look cheap and desperate.

You can find more examples of Poor vs. Great property descriptions in this article.

Great Photos that are “Light and Bright”

Without pictures, 95% of tenants won’t even bother with your listing. YOU NEED PICTURES, and the good news is that getting some great pictures is easier than ever.

What you need: A Smartphone Camera. Sure, if you are into photography and you have a DSLR Camera, go for it. But a smartphone camera will do the trick.

Get your property ready: I don’t recommend doing photographs when a tenant is living in the space, unless the space is really clean and looks great (usually not the case). So wait until the current tenant moves out of the unit. Then make sure you have one of 2 set-ups:

Option 1: Completely empty and clean. This is how I do mine. There are zero items laying around. It is just a nice inviting empty house. I do the pictures right after my make-ready cleaners are done, so everything looks clean and shiny.

Option 2: Staged. This means you bring in furniture and decor to help show prospective tenants what it will look like with their own stuff. If done right, staging a rental property can look great. And you only have to do it one time and you’ll have those pictures forever. The downside is that staging is expensive. There are usually professional staging companies that charge a few thousand dollars for this service. It may be worth it for a high-end rental catering to wealthy renters. And as a side note, you usually see staging done when someone is trying to sell a home, as opposed to renting it.

Which option should you choose? See what other listings in your area are doing. My units are in the $1,000 – $2,000 rent range, and I photograph them empty and clean. And they always get rented very quickly. That’s what I recommend to most landlords.

What Rooms to Photograph? In short, photograph all of them. But pay particular attention to the Kitchen, Bathrooms, and Living Room. Those are what sell people. Also, don’t forget at least one good photo of the front of the unit, and the backyard or any other exterior spaces. Here’s your room photography Checklist:

• Kitchen
• Bathrooms
• Living Room
• Dining Room
• Bedrooms
• Laundry Room
• Common Areas
• Exterior Spaces

Good Lighting. This is huge, and I cannot stress it enough. I have found that leads are attracted to the rental photos that show the unit as “light and bright.” I guess people want to be in the bright, happy, sunny, clean light as opposed to a dark, dank, moldy dungeon. Here is a picture I just did for one of my own rental properties– notice all the light:

So open all the blinds and turn on all the lights. Flood the rooms with as much light as possible before you take the pictures. Also pick a time of day where the sun is shining into the rooms you are focusing on. Play with your smartphone camera while your taking the pictures. Sometimes tapping at different places when you are lining up the shot can change the lighting for the shot. And don’t worry if the pictures are not coming out perfect because you can still lighten them up a bit when you edit them.

A cool trick for exterior photographs is to wait until around sunset, turn on all the interior lights, and then photograph the outside of the unit. It makes for a really warm and inviting look, like in this picture below:

Angles. Take the pictures from eye level, not up high or down low. It is best to stand in the corners of the room to get the widest angles. You can usually just get 2 walls of a room into a picture to make it look good. Maybe a sliver of a 3rd wall. Here is another picture from my latest listing, taken from the corner of a bedroom:

Editing. Go home and take a look at your photos. You want to pick the 12 best pics that cover all the rooms. If you know how to edit photos with an app, try playing with the brightness adjustment tool. You can usually brighten up the pictures even more to get that “light and bright” effect. You can also crop out anything weird, resize them, etc.

Always Be Honest: In presenting your photos, you want to strike that balance between putting your best foot forward and making your unit look great, vs. being deceptive. For example, a fishbowl camera lens, or heavily photoshopping a picture, can totally mislead a prospective tenant on what the property actually looks like. You don’t want to waste a prospective tenant’s time (or your own) by misrepresenting what the unit actually looks like.

Before posting them, do a final review with this rental listing photos Checklist:

• Are the images clear?
• Are they bright and not Dark?
• Is there no Clutter in the image?
• Make sure your reflection is not in the image
• Are the images rotated so they are upright when you upload them?
• Did you get all the rooms, or at a minimum the Kitchen, Bathrooms, and Living Areas?

A final thought on photos. Should you pay for Professional Photos? If you try the above and are not satisfied with your own work, consider that a professional property photographer may only charge a couple hundred dollars. You will end up with awesome photos that can be used over and over. It is probably worth it.

But whatever you do, DO NOT post a rental listing without photos! Now let’s take a quick look at how to get your listing in front of prospective tenants so you can start generating leads.

Step 3 – Publish it and Promote it

Now that you’ve picked platform such as Avail, got your Title, Description and Photos, it’s time for the fun part – activating your listing!

If you have typed out your title and description, you can just “copy and paste” it into the listing platform. And you can upload your pictures. Then review everything one last time and click “publish”. Your listing will go live and you can wait for the leads to start coming in. If you are using a listing site like Avail, the listing will start popping up all over the internet.

But don’t stop there. Share your listing on Social Media. Just by sharing it with your friends on Facebook, you’ll start to generate interest. You never know who knows somebody looking for a rental in your area. It’s free advertising and it only takes a second so do it!

If you are proud of the pictures, share them on Instagram. It only takes a second and this will also generate more interest.

If you know any realtors in your area, send the listing link to them. Just be aware that when a realtor brings you a tenant, they will want a fee, so be ready to negotiate with them.

Let’s check out some common questions around listing your rental property online.

FAQ’s about Listing Your Rental Property

Here are a few common questions that come up when creating a rental property listing:

How much does it cost to list my rental property for lease?

Answer: Most sites such as Avail are Free to publish the listing. Then there are other services you can purchase for a small amount, such as digital lease signing, rent collection, etc.

Do I have to add pictures to my listing?

Answer: You don’t have to, but these days, it’s almost a waste of time not to. A picture is worth a thousand words. The pictures are what get leads interested in your property.

What is the best time of year list my rental property?

Answer: Well, whenever you need a tenant! But based on data, you will likely get it rented the fastest and for slightly more rent if you list it from April to October.

Can I ban smokers and people with pets?

Answer: Smokers, yes, you can say “this is a no smoking property.” People with pets: yes, unless it is an emotional support animal. But I would not recommend banning pets, because you will eliminate a ton of leads. Americans love their pets! If you’re worried, you can charge a larger pet deposit, and even make it non-refundable. And if you’re really, really worried, then just say “no pets”.

Now let’s do a legal review to make sure you doing get into trouble by violating the law when you post your listing.

Laws Regarding Listing Your Rental Property

The Number One Law to think about when listing your rental property is the Fair Housing Act. It basically says that when listing your property (or doing anything related to housing), you may not ask or mention anything about the following:

• Race
• Color
• National Origin
• Religion
• Sex
• Familial Status
• Disability
• Sexual Orientation*

I added Sexual Orientation with an “*” because even though it’s not part of the Federal Fair Housing Act, it is part of many state and local housing laws. And I bet that it will soon be added to the Federal Act. Therefore DO NOT discriminate based on someone being gay, trans, etc.

And even if you follow this law when you create your listing, you can still get sued if you don’t rent to people based on the above categories. Or if you set higher standards for a prospective tenant who is in one of those protected groups.

But how would you ever get caught? The Department of Justice does this: They send 2 people to apply for the same home. One will be in a protected class, say for example a black immigrant, and the other will be a “regular” white, christian male native citizen. They will see if there are more difficult application standards for the immigrant. If the landlord is making it more difficult for the immigrant, then Landlord will be in some hot water.

So what can you discriminate on? Because Landlords do indeed get to choose their tenants, correct? The only things you can discriminate on in your rental listing are:

• Bad Credit
• Bad Rental History
• Smoker?
• Income Level
• Pets?

So follow the Fair Housing Act, don’t mention anything about those protected classes, and treat everyone fairly and equally!

Top 5 Free Websites to List Your Rental Property

Rental Listing Site	Cost?	Broadcasts to Other Sites?	Extra Tools?
	FREE	YES (12+)	YES
	FREE	YES (3)	YES
	FREE	YES (2-3)	YES
	FREE	YES (3)	YES
	FREE	YES (3)	YES

How Does COVID-19 Coronavirus Affect My Rental Property Listing?

Well, we all want to stay safe from Coronavirus. And that means you cannot have tons of people all at once looking at your rental property. Zillow offers 3D Home Tours so that prospective tenants can do a tour online. But we must admit, this is no substitute for the real thing.

Showings during Covid? When prospective tenants want to see your property, make sure they are already screened. That way you are not wasting your time and putting yourself at an unnecessary risk. If you have multiple applicants that need to see your property, make sure they wear a mask, and space them out over time (maybe 1 per day, or 1 every other day).

What about signing the lease? With all the lease-siting technology available, such as “contactless” digital lease signing from Avail, you do not need to sign a lease in person with the tenant. Avail will just email them a link and it is easily completed over the internet.

Collecting Rent? Just as easy. Don’t put yourself at risk by collecting rent in person. They can mail a check, use PayPal, or Avail has plenty of rent-collection tools that allow your tenant different ways to pay.
Check out this article to learn about “contactless” rent collection.

Maintenance Issues? With smartphones, tenants can send you pictures. No need for you to go over there. Avail helps you by letting the tenant open a maintenance “ticket” along with pictures, and you can decide how to handle it. If a plumber or technician must go onto the property, make sure they wear a mask, cover there shoes with booties, etc.

So as you can see, with the right digital tools, you can do a lot to avoid COVD-19 as a landlord.

Invest in Your Rental Listing and it will Pay You Dividends

When creating your rental listing, keep in mind that it is no different than maintaining your property itself. Once you create a good listing with good pictures and text, you can use it over and over again. A good listing will get a higher rent premium for your property, and a tenant that pays rent on time. It’s part of being a successful landlord.

I hope you enjoyed this article and found it helpful. I want to wish you success in creating your own awesome rental property listing that will bring you a solid, rent-paying tenant.

And remember, for your own sake, when you list your rental property, ALWAYS treat applicants and tenants with the utmost respect and professionalism, no matter what!

The post List Your Rental Property in 3 Easy Steps – with Checklists appeared first on Landlord Guidance.

And how you can avoid making the same mistakes!

If only we had the ability to see into the future and prepare for things we couldn’t anticipate under ordinary circumstances. But life doesn’t give us this loophole, and instead we have to do our best to roll with the punches and adapt to every situation.

There is a silver lining, of course. Experience offers wisdom, and those who are more experienced than we are often pass down the knowledge they have gained. So let’s learn from their mistakes!

Being a landlord is challenging, but it’s also incredibly rewarding (and not just in a monetary sense). To get started on the path to success, here are five things experienced landlords wish they’d done differently, and how you can learn from their mistakes:

1. ALWAYS Screen Your Tenants

Even if it’s a friend of a friend. This isn’t about mistrust; it’s about covering all your bases. If you had a friend who you knew never returned things they borrowed, how likely would you be to loan them something of yours? It’s the same concept, but in real estate the stakes are even higher. It’s an unfortunate truth, but you can’t rely on instinct alone or your belief in the goodness of others when you’re renting out your property. Instead, you have to look at the data and draw your conclusions from there. 

There are a few common practices when you’re screening tenants. These include:

• Using a Good Rental Application Form
• Asking about employment both past and current
• Verifying income
• Looking at previous rental experience
• Inquiring about evictions and/or late rent payments
• Running a background and credit check
• Optional: contact previous landlord(s) and employer(s)

Not every landlord will feel the need to go through all of these points, but if you want to have the most informed picture of your tenants and any possible hiccups that could occur down the road, each one is necessary. It might be more work in the beginning, but if you find out something that you only would have known through a thorough screening process, you’ll save yourself a lot of headache and expense in the future. 
If you’re not sure where to start with tenant screening, visit our tenant screening partner Avail here.

2. Make Sure You’re Prepared for Vacancies

As optimistic as you might feel, you should always be prepared to have vacancies. When you’re first renting out your property you’ll have a vacancy period of course, but many more can happen and they’re not always planned out. Unexpected move-outs, little to no notice, and evictions can all lead to longer periods of vacancy that you aren’t ready to deal with. 

Unless, of course, you prepare beforehand.

During a vacancy, not only will you not have rental income, you will also be responsible for utilities and upkeep if you weren’t already. See if you can find out the average vacancy rate for your area to get an idea of the potential yearly cost. This is part of budgeting for a rental property; if you can’t afford vacancies, this form of investment might be too high risk. 

To prepare for vacancies, set aside a separate savings account that acts as your emergency fund specifically for rental-related issues. You should already have this for general repairs and such, but keep enough in there for at least a three month vacancy. 

You can also look at things you’re doing that might extend the vacancy period, such as not including adequate pictures in online listings or charging too much. It’s all well and good to hold out for the right tenants, but if you’re charging way more than other landlords in your area, you’ll end up losing more than you could potentially make.

3. Read the Fine Print, Even if You Wrote the Rental Agreement

No matter what type of contract you’re signing, ALWAYS read the fine print. There is almost a 100% guarantee that something in there could come back to bite you. This applies to rental agreements as well, even if you’re the one who drew it up. If you have an issue with a tenant and they exploit a loophole you didn’t realize was there, you’re going to wish you had paid more attention. 

This is especially common when you find a template online to create your rental agreement from. Depending on the source, there might be a lot of legal jargon that you’re not sure you understand, or provisions you think will never be applicable to your situation. If you’re not sure what it means, do not include it. 

Reading the fine print also has an opposite point you should consider too; don’t let your agreement be too sparse. A one page rental agreement that says, “You’ll use this property and in exchange you’ll pay me this much in rent” is not a well thought-out document. At the very least, your rental agreement should cover:

• The agreed upon rental amount
• Late fees and on which date the fees will be applied
• Total move-in costs and how much of that is refundable
• Conditions for which the refund is applicable (what kind of damage will result in deposits being withheld, how the value will be assessed, etc.)
• A severability clause
• Rules regarding pets
• Rules regarding visitors and overnight guests

There are so many more important points to include, so do your research. We have an entire article devoted to lease agreements that you can check out for more information.

4. Don’t Rule Out a Property Manager

To make the most profit, you will probably decide against a property manager or property management company, at least early on. Many new landlords go into the process confident that they can handle a single rental property with ease, but sometimes it can turn into more of a day job than a side project. When this happens, don’t dig your heels in and refuse to even consider a property manager. 

There are factors to consider when deciding if one is actually necessary or just a convenience, and everyone will come to a different conclusion based on their situation. You might not mind a little stress and have more free time than other landlords to devote to your rental(s). Or, you might be a mess of anxiety and nerves desperately wishing you had never entered into real estate. 

If you fall into the latter category, a property manager might be exactly what you need to make real estate fun again. You will have to meet with a few property managers to find the right fit, and you want to ensure that the people you choose will represent you well and take care of your tenants just as you would. Many potential renters shy away from homes that are managed by companies because there are so many nightmare stories out there. If you choose the right company, however, you can potentially keep tenants for longer because their problems will be dealt with right away. 

So, if it can save you time, money, and mental health, a property manager can be a smart choice.

5. Rentals Are Businesses

There are a lot of activities that make good hobbies: reading, knitting, making model airplanes, etc. Owning rental properties is not one of those activities. If you want a side project that doesn’t take up much time and never leads to surprises, real estate is not the game you want to be in. When you commit to becoming a landlord, you’re essentially starting a business. 

This means you need to be keeping track of profit and loss, evaluating to determine how you can increase profit, and managing your customer service end (whether you’re customer service or a property manager is). If you treat it as a hobby, you will quickly be overwhelmed by all the details and could potentially lose a lot of money if you don’t work to find and keep tenants. Sure, you’ve probably heard stories about landlords who put in 10 or so hours upfront to get their property ready and find good tenants, then after that it was pretty much hands off other than minor repairs. These are the lucky cases, and they’re not all that common. 

As a landlord, you’re in charge of three areas: tenants, the property, and your finances. Each of these pieces can take up a lot of your attention, but they require balance. Don’t focus so much on finances that you lose tenants due to ridiculous costs, and don’t try so hard to please your tenants that your finances take a hit. Decide how much to put into each area to maximize benefits in all three, and you’ll have a successful business that brings in the money for years to come.

You can also take advantage of Online Property Management Software tools such as Landlord Studio, which helps you keep track of finances, set reminders for specific properties, and even screen tenants. 
Entering into the real estate realm is like stepping into a foreign country without a guidebook. You don’t know where to go, and you probably don’t even speak the language. In both cases, others are your greatest resource. By listening to advice and following the tips of those that are more experienced, you can continue on, confident that what you seek is right around the corner.

The post Top 5 Things Experienced Landlords Wish They’d Done Differently appeared first on Landlord Guidance.

The short answer is “YES” because it protects you.

I have all my rental properties grouped into a few different LLC’s. I’ll elaborate on the reasons below, but if you own a rental property and want to protect your personal assets, starting an LLC is definitely something you should do. I recommend using Swyft Filings to incorporate your LLC. It is vastly less expensive than using an attorney, and they will handle everything for you.

Asset Protection

The top reason to put your rental properties into an LLC is to protect your other assets.

Let’s look at an example. Your tenant trips and falls down the stairs suffering a serious injury. They hire a lawyer and decide to sue you. If your rental property is in your own name, they will be suing you personally, going after your personal assets, savings, etc. You are not protected.

Now lets say a year ago you were smart and had started and LLC called “ABC LLC.” You had deeded your rental property (learn about this here) into the LLC. The lease signed with the tenant names the Landlord as ABC LLC, not you. So the same tenant falls down the stairs and decides to sue. They will now only be able to sue ABC LLC. If they win, the most they could take from you would be the assets owned by the LLC (the house). They could not go after your personal savings, investments, or get a judgment against you personally. So the small cost of starting an LLC literally saved you from financial ruin.

Remaining Somewhat Anonymous

Where I live in Texas, if someone wants to snoop on someone else, they go to the County appraisal district website and type in that person’s name. If that person owns real estate in their own name, you can see all their properties and the value of those properties. Do you really want the world to easily access how many properties you own and the value of them? I’d rather have people think I’m broke. Imagine if a lawyer is trying to decide whether or not to sue you. He may do a quick search there to see if you own real estate he can go after. It’s better if he finds nothing. Keep in mind that nothing is totally anonymous because if someone digs deep enough they could still figure out the owner of the LLC.

Tax Reasons

This will depend on each person’s individual situation, but generally there will be some kind of tax advantages you can find. Some examples that could apply to you would be avoiding double taxation (pass through taxation), reducing self employment taxes, and other allowable write-offs. My tax guy had me do the “Subchapter-S election” (makes the LLC be taxed as an S-corp) so any profit from my LLC just passes thru and shows up on my personal return.

What are  The Steps to Put Your Rental in an LLC?

It’s really quite simple. Here are the steps:

1. Pick a name (Fun Part)

Use a service like Swyft Filings to find a name that nobody else is using. Swyft Filings even offers a Free Corporate Name Search. You really should have fun with this, but also pick something that sounds professional. Many people pick a random word (maybe “pencil”) the word “properties,” so for example “Pencil Properties, LLC” would be the business name. I like to browse through thousands of names of paint colors to get ideas for LLC names. Once you nail down the name, follow the directions and order the LLC. All the paperwork you need will be sent to you.

2. Take it to the Bank

Once you get the LLC Paperwork, take it to your bank and open a business bank account. This is important. If you are ever sued, you need to show that you kept the LLC finances separate from your personal finances. So from now on, when you collect rent, it goes into the business account. When you pay mortgages or other expenses, do it from the business account. Keep your rental business separate from your personal finances. Of course when the money builds up in your business account, you will transfer it to your personal account (that’s the reason we do all this work, right).

3. Put the Property into the LLC

Now it’s time to protect yourself! Simply create a quitclaim deed that “deeds” or transfers the ownership of the property from your own name to the LLC. The deed will list you as the “Grantor” and the LLC as the “Grantee.” This deed then must be filed in your county records (you can do this by mail). This part is easier than it sounds- you can do this. To create a simple quitclaim deed, check out this eForms Quitclaim Deed Form. Then go to the website of your County Clerk and look for instructions on how to “record” or file a deed. There is usually a small filing fee.

4. Changes future Leases

So now you own an LLC and the LLC owns the rental property. Therefore the Landlord is now the LLC. So when you sign a lease with a tenant, on the lease the Landlord should be “ABC LLC,” NOT you. So if a tenant ever wants to sue over something, and goes to visit an attorney with this lease, the attorney will see that he needs to sue ABC LLC (let’s still hope your LLC never gets sued!).

In conclusion, putting your rental properties in an LLC protects you and helps you in many ways.

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