Hello all... Posting this question as I am looking for some tax guidance on what to do next with property investments that I made, I promise I'll try to be a brief as possible. When the market tanked in 08-09 I was able to purchase a property for approx 10% of the prior value. After fixing up the house mainly cosmetic, we used as a cottage and let friend use as well for a few weeks here and there. Being in the area frequently other opportunities came up with close proximity which I purchased with the idea this would be good to have down the road. The purchase price was pretty low and the taxes as well so there wasn't a huge burden financially for me. There are 3 houses thus far purchased in the past 6 years or so. I am employed with a w2 so this wasn't my job, just investments that I came across. Some were purchased with the idea of hold fix and rent out and over the years there is a lot of improvement done to each property along with general items purchased to be able to maintain and work on these properties. These were all purchased at around 10% of the current value knowing there are updates needed.
Properties are about 120 miles round trip from my main house and I visit at least 1-2x a week. Major work like roofing/siding was contracted out. Smaller repairs were completed by myself & father. Needless to say over the collection of the past few years I haven't kept the best of books as this wasn't really a business, or I thought it wasn't. At this point, I am looking to gain some of the benefits of owning these and properly do things as I plan ahead over the next year to have available as rentals and possibly selling one of the units or further developing/splitting land. I do plan on putting an addition & building a garage next year on one of the properties so planning ahead for this year and next is needed.
Are there any benefits to setting up an LLC or holding company from now for these properties before they are "rented" out? Regarding deductions/tax benefits not sure what else can be claimed other than the taxes currently? I'm no looking for a 2nd vehicle and after discussions with some friends, they suggested looking into setting up a business as this is what I have although there is no income just yet.
Thanks for your assistance.
Mark
