Creating a Rental Property LLC in New Hampshire

Creating an LLC for your New Hampshire rental property equips your investment with the granite-strong foundation of legal protection and tax benefits, positioning it to thrive in the Live Free or Die state’s diverse real estate landscape.

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In New Hampshire, renters account for 29% of the overall population. This makes it a great market to start renting real estate. To get the full protection of the law, consider starting a limited liability company (or LLC) to buy and rent your property. Using an LLC adds a layer of protection for your assets and is a great way for real estate investors to manage their properties.

When you use our business services to start your rental property LLC in New Hampshire, we’ll ensure you complete all the steps for formation, so the state won’t reject any of your documents. You’ll get access to our team, which will remind you of important compliance deadlines and requirements. Finally, we’ll be here with our business services to support you every step of the way.

Benefits of creating LLCs for rental properties in New Hampshire

Liability protection and personal v. business property

The most significant benefit of creating an LLC for business owners is the added protection from liability. If someone is injured on your property or you owe a contractor money, they must sue the LLC before reaching your personal assets. With an LLC, you’ll easily be able to separate your business and personal expenses. To continue the legal protection of an LLC, you must keep your business and personal assets separate. If you co-mingle the rental income with your personal expenses, you could lose the liability protection from starting a separate entity.

Pass-through taxation

Separating your business and personal expenses can help at tax time, too. The IRS uses “pass-through taxation” for LLCs. This means that you’ll report your business’s profits or losses on your individual tax return. You’ll pay the individual tax rate on your income rather than the corporate rate. In addition, you can deduct your business expenses from the taxes you’ll owe.

Series LLCs

When you begin to research the benefits of an LLC for a rental property in New Hampshire, you might learn about the series LLC. The benefit of a series LLC is that each “series” under the “master” LLC is treated as a separate business without filing and managing separate registrations. Each series can hold property separately in the series LLC, so your property is protected from the other properties’ obligations.

New Hampshire doesn’t allow for the formation of series LLCs at this time.

What to know before creating a rental property LLC in New Hampshire

There are some important benefits to forming an LLC for property owners in New Hampshire.

How to form an LLC for your New Hampshire rental property

By now, you’ve realized that property management might not be as simple as you initially thought. But, starting a New Hampshire real estate LLC doesn’t have to be daunting. When you start your New Hampshire LLC with us, we’ll walk you through completing these five simple steps:

Step 1: Name Your New Hampshire LLC

When selecting a name for your LLC, be sure to choose one that meets state requirements. We can do a search for you to see if the business name you want is available. If it is, let us reserve the name while you get the filing paperwork together. 

Step 2: Appoint a Registered Agent

Businesses in the state are required to appoint a registered agent. This person is responsible for receiving important documents on behalf of the LLC, such as state correspondence and legal notices. If you need a registered agent, we can help you find one.  

Step 3: File a New Hampshire Certificate of Formation

To officially form your rental property LLC, you need to file a Certificate of Formation with the right state office and include the appropriate filing fee.

Step 4: Create an Operating Agreement

Your LLC’s Operating Agreement is one of your most important business documents. It governs how your LLC runs and provides instructions for anything from voting procedures to dissolving the company. If you’re not sure how to create an Operating Agreement, we offer templates that can serve as a guide. 

Step 5: Apply for an Employment Identification Number (EIN)

The IRS assigns businesses a nine-digit EIN that is used to identify their enterprise. Having one is necessary for certain business matters, such as opening a business bank account, hiring employees, and getting financing. You can apply for an EIN yourself on the IRS’s website, or we can do it for you with our EIN service

Transfer title of the property to the LLC

Once you’ve registered your LLC, you can start buying properties or transfer your property’s title to the LLC. You’ll need to file the deed with the Register of Deeds in the county where your property is located. Then, you’ll pay a transfer tax to the state. The tax is based on the property’s fair market value if the LLC does not pay consideration for the transfer.

When transferring property from an owner to an LLC, it’s essential to notify your lender if you have an existing mortgage or loan on the property. They’ll need to adjust the paperwork to reflect the LLC’s ownership. They might also rework the terms of the loan, including the rate.

Update the rental agreement

If you haven’t yet rented out the property, be sure to update your rental agreement to show the ownership change. If you already have tenants, you’ll need to inform them of the change and edit the current lease agreements to reflect the LLC as a party to the agreement.

Who should form a New Hampshire LLC for their rental property?

Anyone who plans to buy and lease commercial properties, vacation homes, or residential units can benefit from an LLC. Property managers who already own homes can start an LLC at any time and gain the legal protections of a business, but it’s easier to form your LLC first. If you create the LLC first, you can buy property under the LLC’s ownership, and the deed will be in the LLCs name. Otherwise, you’ll need to transfer the property to your LLC after formation, which we’ll explain below.

How We Can Help

Forming your LLC doesn’t have to be complicated. Let us help simplify your life with our LLC Formation and other business services. Starting your own business is challenging enough, so don’t try to go it alone. We can help. We have many services that will help you start your company, including our Business Plan Template and our Worry-Free Compliance Service.

New Hampshire LLC for Rental Property FAQs

  • The benefits of creating a rental property LLC in New Hampshire include legal protections from liability and the separation of business and personal property. You’ll also be able to deduct business expenses from your tax return.

  • Your company name must be unique from any other New Hampshire business. It should contain the words “limited liability company,” “L.L.C.,” “LLC,” or any other similar abbreviation.

  • You should register your LLC in the state where you will be “doing business.” If you’re making rental income from properties in New Hampshire, the state considers you to be “doing business” in New Hampshire. Therefore, if New Hampshire is the only state you are doing business in, then you shouldn’t need to register the LLC in your home state. But it’s always best to check with your local authorities to verify any requirements.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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