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Make sure the property is in a good part of the city. Yes, good idea on the LLC. Check for past evictions. Don't fall for sob stories. Drive past their current residence.
Call past landlords. Not just the current one, because the current one may be glad to see them go. You will get a clearer picture from the landlord before that. Collect 1 months rent upfront, then at the 1st of the next month collect a prorated amount for the prior month.
Call past landlords. Not just the current one, because the current one may be glad to see them go. You will get a clearer picture from the landlord before that. Collect 1 months rent upfront, then at the 1st of the next month collect a prorated amount for the prior month.
TJay74, setting them up in an LLC doesn't shield the gains/losses. It is only setup for liability protection. This is important when your renter has a friend over and falls off the roof and breaks their neck. They will sue you for everything you got, but the LLC preserves some protection for you.
Shoot me a PM. We manage for hundreds of clients and help them people find "investement" properties all the time. We are not in OKC but I can help you with some companies that do some the same in the OKC area. Our website for Tulsa area is: www.propertiesplus.com
There is a pretty easy formula to finding the right deals.
There is a pretty easy formula to finding the right deals.
The LLC will just be a pass-through. You will not have any tax advantages with it.
We that wont then if that is the case, we are trying to find a way to shelter some of our money currently and be able to make a reutrn on it down the road. Already max out our 401k's each year now so th thought was a rent house as you can write off expenses in regards to the rental property.
Rental properties are a good investment and a way to diversify. There are write-offs, but remember you have to spend money to write off it as an expense. If you are in a 28% tax bracket, you have to spend $1000 to write off $280 from your taxes.
The best way to make money in rental property is buy good properties for cash (not borrowed money) and enjoy the income. You get a pretty decent return on a fairly safe investment. Buy good properties at the right price, and in the right areas, and it can be very good. Buy cheap properties in a bad neighborhood and you attract tenants that will cause you grief and destroy houses. The hope is to bring in a good income from your investment, depreciate the property, and then sell at a good price/profit years later with it being only subject to capital gains.
As far as the LLC, it is to limit your exposure. It can be a pain but it has lots of pluses to limit liability. It is a separate entity and must be treated as such. You need to have a checking account in that name. Register every year, file another form with taxes, etc. All expenses and income need to go through accounts in these names. Then you need to write checks to your personal accounts to distribute income. If enough income is involved to require quarterly tax payments, they are due based on income, not when you pay yourself from the LLC. So a check quarterly needs to go to your personal account. Then you write a personal check to send in the payment. Pretty much only a C-Corp can hold retained earnings without you having a personal tax obligation. (but a C-Corp can/will cause double taxation).
It is a good way when you have partners. (you really don’t want partners in a property anyhow)
The best way to make money in rental property is buy good properties for cash (not borrowed money) and enjoy the income. You get a pretty decent return on a fairly safe investment. Buy good properties at the right price, and in the right areas, and it can be very good. Buy cheap properties in a bad neighborhood and you attract tenants that will cause you grief and destroy houses. The hope is to bring in a good income from your investment, depreciate the property, and then sell at a good price/profit years later with it being only subject to capital gains.
As far as the LLC, it is to limit your exposure. It can be a pain but it has lots of pluses to limit liability. It is a separate entity and must be treated as such. You need to have a checking account in that name. Register every year, file another form with taxes, etc. All expenses and income need to go through accounts in these names. Then you need to write checks to your personal accounts to distribute income. If enough income is involved to require quarterly tax payments, they are due based on income, not when you pay yourself from the LLC. So a check quarterly needs to go to your personal account. Then you write a personal check to send in the payment. Pretty much only a C-Corp can hold retained earnings without you having a personal tax obligation. (but a C-Corp can/will cause double taxation).
It is a good way when you have partners. (you really don’t want partners in a property anyhow)
Let me know if you me help looking for properties..
