Need Advice On How To Manage Property (LLC?)
I own a duplex that I lived in for 5 years, while I rented out the other side. I recently moved to another state (family reasons) and want to rent out my house -- both units of the duplex. I also want to eventually (within next 6 months) buy more income property. I'm all new to investing.
I have a reliable family friend who has agreed to manage the propertty (I wrote up a list of duties and compensation and we're signing an informal agreement).
What is the best way to manage this, keeping in mind I want to invest in the very near future? I was thinking of forming an LLC (eg, "KM Property Management"
so that the tenants are not writing their checks directly to the landlord. That would also help matters for future rental properties.
Any suggestions? I know many of you are going to comment on the friend thing, which I will take into consideration, but I mainly want to know about the LLC formation.
An LLC is recommended to hold properties in. Some will go so far as to establish multiple LLC's, so everything is not in one pot, so to speak.
Your right about the friend managing for you....I don't think we need to tell you it is a bad idea. You are asking from trouble there.
If you must go with an unlicensed property manager, and they are going to be handling money/rents, get them bonded.
Frankly, I highly recommend professional property managers that are licensed. They are worth it! They know the business already so you don't have to teach them, they are required by law to maintain funds and report to you, and are covered by state funds if they make serious errors.