How Primary Residence can become Rental
We are moving to a new house and want to keep our existing house as a rental.
We are wondering about the possibility of putting the house in a trust or some other method to put the property under the "control" of our business, rather than ourselves. Any ideas or advice is welcome. Thanks.
This question was originally posted in the Landlord Forum and moved to this forum where it might get attention from folks with the right expertise to answer it.
Quote:
in which you are named the managers, thus giving you control of the property. If the property is financed with a mortgage, it probably has a due-on-transfer clause (also called an acceleration clause), so technically you will need to get the lenders written permission before transfering the property, otherwise if the lender finds out (which is probably not likely), they can call the loan all due and payment immediately. If you do seek approval from the lender, they will likely require that you guarantee the mortgage so that you remain liable on the mortgage, should the mortgage ever go into default.
On 2003-03-21 12:21, boysrus wrote:
We are moving to a new house and want to keep our existing house as a rental.
We are wondering about the possibility of putting the house in a trust or some other method to put the property under the "control" of our business, rather than ourselves. Any ideas or advice is welcome. Thanks.
Forget the Trust, that is not going to provide you any protection from creditors. Rather, retitle the deed into a limited liability company ("LLC"
After deeding the property into an LLC (not a corporation, because of the adverse tax consequences if you ever try to get the property back out of the corporation), you can have your revocable trust own the LLC membership interests so that it will avoid probate should you and/or your wife die, or it will permit a successor trustee to control the property if you ever become incapacitated and unable to manage your financial affairs. Otherwise, if you don't do this your representative will have to go to court to get permission to act on your behalf. You will save alot of headaches for many people if you set your affairs up in advance.
Hope that helps,
Taxjunkie