A Must-Read for Homeowners: Should You Transfer Your Property to an LLC?

Airbnb has long become a preferred source for people seeking authentic experiences and good-value vacations.

As a homeowner, have you ever wondered: if a guest is injured in my house, will I be liable? Could I have to pay a large sum in compensation?

Some people think guests can be injured for all kinds of reasons, so the host can simply find a way to disclaim responsibility when it happens.

In reality, however, it is far from that simple.

Generally, when a guest is injured, lawyers do everything they can to help the guest win a lawsuit against the host. That is why news headlines often say: a guest was injured by xxx, and the host lost the case and paid $$$$ in compensation.

Are lawyers working so hard to uphold justice? Certainly not!

There is only one reason: they can earn money. Lawyers in the United States make money by taking a share of compensation after winning a case; the more prominent the lawyer, the larger the share.

Homeowners, as members of the “landowning class,” seem like lambs to the slaughter in lawyers' eyes.

What should I do? Do I need to put my property in the name of an LLC—a Limited Liability Company?

This is a question I am often asked.

Homeowners generally want to put a property under an LLC for two reasons: first, fear of lawsuits and a desire to limit risk; second, whether it can save taxes.

Today, we will discuss limiting risk.

First, let us take an example.

A tenant sues a homeowner, seeking US$1 million in compensation.

If the property has only US$200,000 in net equity and is held in the homeowner's personal name, the remaining US$800,000 can be pursued against other assets held personally, such as other properties or savings.

But if the property is held by an LLC, liability for the claim is limited to all the net assets held by that LLC; other assets cannot be pursued.

Note that this means net assets.

If your property has a market value of US$800,000 but you also owe US$800,000 on the mortgage, net equity is zero. In that situation, even a lawyer who wins a lawsuit would have nothing to earn, so no one would sue you.

In summary, if you bought a property entirely with cash, have no mortgage, hold it personally and also own many other properties, you have even more reason to transfer it into an LLC as soon as possible! If you have very little net equity, you have little to lose, and no lawyer would want to sue you.

As a homeowner, you may now be wondering: my home is quite good, but how much could it earn on Airbnb? Would it earn more than a long-term rental? Would it involve a lot of trouble?

Contact us right away! We will evaluate it for you free of charge.

If you:

Hope to increase rental income through short-term rentals;

Cannot spare a great deal of time to handle the small details;

Occasionally need to use the home yourself, making it unsuitable to empty out the furniture for a long-term rental;

Then:

Snowball Rentals’ management team is your best choice.

From pre-launch vacation-rental styling, big-data analysis and online marketing to tenant screening, dynamic pricing, customer service and sales, cleaning and repairs, Snowball Rentals provides everything as one complete service for your home.

This Week’s Booking Results

Through long-standing relationships with insurers, assignment companies and technology companies, Snowball Rentals rents homes for medium- and long-term durations at short-term rates, then gives owners a rebate of 5% in management fees to maximize their income.

Winter is the low season for Seattle’s short-term rental market, especially in 2023. Some recent large bookings, however, have been like a ray of sunshine, giving us high hopes for Airbnb’s performance this summer!

The detached house below, located in Seattle, has an estimated long-term monthly rent of approximately $5492, which can be looked up on Zillow.

Note that this is the income from renting out the entire house.

The owner placed great trust in the Snowball Rentals team, commissioning us to operate it as a short-term rental. We divided the house into an upstairs section and a downstairs basement section, renting them separately, with repeated successes along the way.

Upstairs: $15256.74 in monthly short-term rental income!

As shown in the booking screenshot below, a guest rented the upstairs through Airbnb for 28 nights—almost a month.

The rental income plus cleaning fee for this booking reached $15256.74!

Downstairs: $6080 in monthly short-term rental income!

As shown in the booking screenshot below, a guest rented the downstairs through Airbnb for 100 nights—more than three months.

The rental income plus cleaning fee for this booking reached $20265.24. Using a 30-day month, this works out to approximately $6080 in monthly rental income!

In summary, with Snowball Rentals operating this property, monthly rental revenue rose from $5492 for a long-term rental to more than $21000—$15000 upstairs plus $6000 downstairs—nearly four times as much.

After Airbnb’s downturn in 2023, we at Snowball Rentals hope to help owners regain ground in summer 2024!

Once again, heartfelt thanks to our homeowners for their trust and support. Whether the market is strong or weak, Snowball Rentals will stand with you and look for ways to increase your income!

Some homeowners will surely ask the hard question: was a large booking like this just a stroke of luck? What if the home does not rent? A long-term rental is more stable—even earning less is better than earning nothing!

Our answer is: the outcome depends on what we do.

Vacation-Rental Styling

Competition on Airbnb is becoming increasingly intense. The days of piecing together secondhand furniture, taking phone photos and earning easy money on Airbnb are over. Airbnb hosts have moved toward professional operations.

Careful design and furnishing before launch, followed by professional short-term rental operations, will be the only choice for a rental that continues to generate high income.

Here is another of Snowball Rentals’ core services: vacation-rental styling!

Take the vacation rental mentioned above: our designer personally furnished the upstairs space, creating a beautiful, carefully finished interior! This helps explain why the upstairs alone could rent for more than US$15,000 per month.

Because of the circumstances, we could only furnish the downstairs with the owner's existing used furniture. Even so, it quickly secured a 100-day booking, helping the owner earn US$20,000 without doing the work personally!

We also share practical vacation-rental styling plans and creative ideas to help you achieve more with less spending!

Keep rental income growing!

Referral Rewards

If you are already a Snowball Rentals homeowner, you receive a US$500 referral fee for each referral.

If you are not yet a Snowball Rentals homeowner, you receive a US$250 shopping voucher for each referral.

Snowball Rentals Management

1. Full service — We provide pre-launch rental design, furniture procurement, furnishing, professional photography, online marketing, copywriting, tenant service and sales, cleaning, supply purchasing and property repairs. You only need to be a hands-off owner; we handle the rest.

2. Multi-platform promotion — We promote the home on Airbnb, VRBO, HomeAway and other mainstream platforms for maximum exposure.

3. Dynamic pricing — Using big data, we adjust prices every day according to seasonal demand, holidays, last-minute vacancy offers, weekends and local activities, maximizing the owner’s income.

4. Income-improvement SOP — We follow 44 secrets for maximizing short-term rental income, optimizing each property’s online marketing, on-site operations and other aspects to work toward maximum income.

5. Flexible owner stays — Owners can flexibly choose when to stay themselves. This is especially suitable for owners with multiple residences around the world.

6. Terminate at any time — Management does not require an annual commitment. The owner can end the agreement with one month’s advance notice.

7. Corporate housing — In addition to nightly rentals, we work with insurers and assignment companies to provide executives with hotel-style managed accommodation for stays 30 days or more.

8. Transparent fees — For rentals 30 days or more, we charge 15% of accommodation revenue. For nightly rentals 30 days or less, we charge 20% of accommodation revenue.