Dear Forum and Airbnb,
in the debate about lack of profile...
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Dear Forum and Airbnb,
in the debate about lack of profile picture, I would also like to express as a host (and traveler) m...
Latest reply
Hello All,
I have been hosting for a few months now and want to add a layer of liability protection. I want to have guests go through an LLC instead of me as a person. I have already discussed with my insurance company and they have no problem adding my LLC as an additional insured. I am currently registered with my county under my name for the AirBNB, and I would be changing that over as well. I will be setting up a separate bank account as well.
I will still be owning the home, but the Homesharing (AirBNB) would be going through the LLC.
Has anyone done this and does it cause any problems with my AirBNB listing?
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Hi,
It means you are not using Airbnb as a private person, but you are a commercial partner. You probably will need a business account at Airbnb.
I live in Europa, for me the rules would be in such a case: https://www.airbnb.com/help/article/1321/legal-obligations-of-eu-business-hosts-offering-accommodati...
Maybe you can find some answers in it, i have no idea how this is implemented in the US.
Hope this helps,Emiel
@Stephanie365, as the owner of the property, wouldn't you still be a target for a lawsuit should something happen to a guest on the property?
I operate several LLCs myself for different businesses, but I am not entirely sure what liability you are going to be shielded from if you still own the property as an individual, but the AirBnB activities go through the LLC.
Who advised the use of an LLC in this manner?
I have LLCs for other businesses. My LLCs owns nothing; everything is rented so the LLCs themselves have no assets to lose should someone sue. I personally would be renting the apartment to my LLC for the LLC to conduct business.
@Stephanie365, I get the point of using LLCs. I am just thinking that should something happen on the property, you as an individual would be included in any lawsuit, despite the structure of renting to the LLC.
I imagine the liability of the LLC would solely be in the area of rental operations (meaning, if the LLC made some sort of error handling reservations and such.)
The condition of the property is the responsibility of the owner, despite who rents from it. Plus, people tend to throw anyone even obliquely related to an incident into lawsuits.
Does anyone really think that if a person injured themselves on your property, they would avoid suing the owner? Especially in favor on solely suing an asset-less LLC?
Every web page I could find discussing the use of LLCs for rental property starts with making the LLC the actual owner of the property. This is why I figure that if you remain as the actual owner of the property, using the LLC to handle the rental aspects is not going to shield you from a lawsuit.
I am not a lawyer, so you should certainly consult with someone knowledgeable about LLCs and real property.
(I do hold some real estate in an LLC, and the LLC is the actual owner of the property.)
It would be a shame to go through the trouble and expense of creating an LLC and not gain the benefits you are seeking.
Super helpful info on the basics of the LLC ownership//rental structure.
How does one go about buying property with an LLC?
@Sara494, the process is very similar if an LLC is buying the property. There is a minor procedural difference if your first buy the property, and then set up the LLC (you have to transfer the title to the LLC.)
If you already have the LLC set up, the LLC buys the property and you sign on behalf of the LLC. Rent is paid to the LLC account, and expenses are paid by the LLC.
Many people set up the LLC with "pass-through" taxation, so the existence of the LLC doesn't change your tax burden.
There is a wealth of information online available regarding using LLCs with real estate.
@Matthew285 you can also place the property into an irrevocable trust. The trust would have control of the property and your individual liability would be mitigated in the event of a claim being filed.
I also don’t see the benefit of an LLC in this situation as described in the post. Is the renting back for tax purposes? @Stephanie365
My lending company asked me to stay away from trying to buy the property into the llc as they then would think we would not be responsible and be an easy “runner” if things did not work out well.
Sorry so late to the conversation... So, Soren12, how do you hold your rental property? Own it and carry sufficient insurance to cover accidents?
LegalZoom.com is the easiest way.
Smart idea, I'm new to this and am trying to gather information on what is best for my partner and I. We own 3 homes 2 of which we currently airbnb. We also flip homes and I'm a silent partner / investor. I have Proper Insurance that covers liability up to 2 million on all properties. My concern is taxestaxes as a host/ owner. Is it better to do a partnership, LLC or corporation...?
I am in sort of the same boat. I have four airbnb listings and my full time job. Does LLC's give you a tax advantage?
Yes, on the tax advantage. That is a big part of why I'm looking into it.
@Stephanie365 Can you elaborate on this process, steps/tools you used? Documentation...etc.