is there a limit (like 3) on the number of homes you have that are rentals before you need to become a business in california?

Asked by Doctorpg, California Fri Feb 19, 2010

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Matthew Bart…, Agent, Glendora, CA
Wed Apr 7, 2010
Hello Doctorpg,

Some cities do require you to have a business license when a certain number of rentals are obtained by an individual. While I'm not an Attorney, I do highly recommend that you speak with your Attorney and Accountant regarding the matter of incorporating. It is my opinion that you should treat the rental business as just that, a business. There are possible advantages that you can obtain by incorporating. Furthermore, incorporating will allow for you to better protect your personal families assets. This is why you should speak with your Attorney and Accountant. Good luck!

1 vote
Eric Castong…, Agent, San Francisco, CA
Wed Apr 7, 2010
You should contact your local apartment association, attorney and/or your accountant to verify this.

From a rental perspective, I don't see why you'd have to be a business because of the number of houses you own as rentals. There is a limit to the number of homes you can sell in a year without the assistance of a real estate agent, without having a real estate license.

Your attorney and accountant may have a different take on whether you should be a business depending on your tax and liability situation.

Best of luck.

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1 vote
Harold Sharpe, Agent, LAKE HAVASU CITY, AZ
Sun Feb 21, 2010
HI Doctorpg,
You should ask an attorney legal questions.
it is my opinion that you can own any number of homes.
You can be a person owning them you do not need to become a business.
Some cities may require you to pull city business licenses when you have rentals though.

Harold Sharpe
So Cal Homes Realty
(951) 821-8211
CA DRE License 01312992
Graduate REALTOR® Institute,
Real Estate Masters,
Certified Distressed Property Expert,
1 vote
Diane Wheatl…, Agent, Upland, CA
Sat Feb 20, 2010
Here is a link you may find interesting regarding real estate syndicates and REITs. Good luck!

Diane Wheatley, Broker
1 vote
Richard Alan…, , Riverside County, CA
Tue May 25, 2010
None that I am aware of. Research the local codes and visit your cities website. That being said, you can incorporate and become a business or form a LLC and operate as a business for some good advantages. Your tax advisor will have plenty to say about this in regards to depreciating and writing off your investment (s) to their fullest. Structuring it all is a simple job for any attorney. Now, all that being said, get your attorney, a tax advisor and a Real Estate agent and go make a fortune...........
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