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Message: <blockquote data-quote="Mad Professor" data-source="post: 2126947" data-attributes="member: 5316">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)</blockquote>

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