@Carl, I'm not sure the LLC changes whether rental activities are reported on Sch. C or E. Determining whether a rental rises to the level of a trade or business is independent of whether a state-law entity owns the property. If the services are minimal, then it's likely on Sch. E. If you're running a hotel, then you're probably on Sch. C regardless.
In terms of liability protection, I tend to agree that veil-piercing is a risk, and that lender consents likely are preclusive. But, again, it's a matter of taste, and the poster should seek appropriate advice to see whether an LLC makes sense for their specific situation.
