Buying rental properties far away from the bay area
My fiance and I have been working for the past 3 years. Although we don't have much asset, we have high income and we are looking around for house buying.
We do not own any house, but I am thinking that Bay Area housing price is just ridiculous. Rent to price ratio is just really bad, and we can't afford 2+ bedroom house (not condo) in good-commute areas. I would rather put money into downtown indianapolis or austin or denver. In this case, I guess we can't claim we are buying primary residence since it is out of state? if we form a LLC to divide the equity, how would that affect? What are the gotchas we should check? What is the best way to pay as little taxes and interests as possible?
facts
- we are not married and don't plan to marry (legally). I don't believe in that scheme to extort more taxes. We will remain as domestic partners.
- currently make 500k cash + pinterest equity a yr
- assets are about ~300k including our 401k and stock portfolio but don't plan to use it all. Maybe use up to 150k for house. Parents help possible, though not desirable.
- rent is ~4k a month in the bay area, good-commute, 2bd.
comments
If your properties are NOT in a Series LLC state, you may want to set up a Multi-Member ‘Parent’ or ‘Holding LLC’ that owns your other Single Member LLCs in the same state or other states. This allows for a consolidated tax return (saving on tax prep fees), but gives you the inside AND outside protection with multiple buckets all flowing back into one entity.