Author Topic: Turning a property into a hotel/bed and breakfast questions...setting up as LLC  (Read 990 times)


  • 5 O'Clock Shadow
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  • Posts: 99
  • Location: Southeast U.S.
Hello, my wife and I own a house in a very popular and fast-growing area of our city. We currently rent out the main house as a long term rental and live in a separate home we built at the rear of the property. The short term rental business where we are is booming and our neighborhood is at the top of desirability for this type of tourism business, so we want to capitalize on this. Our property is zoned as multi-use so I have the idea of using it/getting it classified as a "boutique hotel" and renting out the rooms in the house.

With this type of classification I'm assuming the taxes would be higher, etc for this use, insurance would be of a more commercial nature, etc.

So should I try to setup the property as an LLC (to insulate it's operation from us legally)? Since it would be a business this seems the logical thing to do but just wanted to see if anyone has had this type of experience with their properties. Would we have to transfer ownership of the property to the LLC and then we would be "investors" into the LLC and employees? The upside potential of short term rental vs long term in my area is significant, which is why I'm looking at going this route. Thanks!


  • Handlebar Stache
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  • Posts: 2154
Look into whether this is possible under the by-laws first.  Where we live you can have a bed and breakfast provided you meet safety standards and have adequate off-street parking.  Most places don't meet the parking requirements so it is a non-starter.  If permitted, make sure your property can meet the standards required before you move forward on anything else.   Also, my understanding of the stats is that room rentals like a B&B are declining in popularity.  People prefer whole house short term rentals.  If you could divide your house into two suites and Airbnb it that would likely bring more revenue.