So you’ve decided that you intend to invest in real estate. It may be that you will be still working a full-time job or you are running a business that at this time takes up most of one’s time. Don’t make the mistake of treating your brand-new venture as an area hobby. Diversifying and building your wealth with real-estate is one of the greatest things you can do for your future.
Buying investment real-estate can be an activity that should be treated as a business and not really a hobby. The mistake that numerous newbie investors make is that they are just rendering it up as each goes along and aren’t taking the time to complete their homework on what to create their business before they start looking for properties.
It is important not to only structure your company well before going out buying properties, but and to be sure that you add forth the most professional image possible. There are always a lot of aspects to carrying this out well that I tell my clients, and I will share just a couple of simple strategies with you here https://duan-sungroup.com/.
First, every new business in case you have a name. Choose a name that reflects your investing goals, the industry, and make sure to avoid words that may have legal implications (ex. “Realty”). Also, make sure to check the availability of the name with the local Secretary of State. This is a significant first step, because this is the name you will use with everything from registering your company together with your state to opening your bank account. You do not want tenants making payments made payable for you personally.
That leads us into my second recommendation. Now that you have a business name and have ideally registered it with their state, you will also want to help keep your company expenses separate from your individual expenses. The simplest way to achieve this would be to open a business banking account separate from your individual banking account, and make sure to have all income and expenses for your properties and other business related expenses flow through it. Don’t make the mistake of mixing your individual and business expenses, because should you ever be audited by the IRS you might lose some if not all of your legitimate business expenses.
When I started investing some years back, among the first things Used to do was create a name and open a bank account. It gave me a professional appearance to all the vendors and customers I came into connection with, and a good way to begin accepting payments and tracking expenses.
Lastly, I suggest meeting with an attorney (real estate or trust & estate) to ascertain the very best legal entity for your individual circumstances. Many real-estate investors work with a Limited Liability Company (LLC) due to the limits on the personal liability in the event of a legal suit. Again, check together with your attorney to ascertain what’ll work best for you, but make certain you don’t own your investment properties in your individual name.