Should I Establish an LLC To Lease a House for Childcare?

[usry2001]

Hello, in the upcoming week I have the opportunity to lease a house for a proposed child care site. In order to submit my application to BFTS I must own or lease the building. Therefore, I am going to lease the building until I know for sure it can be used for the center. My question is should I go ahead an establish an LLC or should I lease under my personal name until I am certain the house will be able to be used as a childcare center.

[AmyKidsCo]

Tom Copeland recommends NOT becoming a LLC.

http://tomcopelandblog.com/should-you-set-up-a-limited-liability-company-llc

[TomCopeland]

Llc?

Hello, in the upcoming week I have the opportunity to lease a house for a proposed child care site. In order to submit my application to BFTS I must own or lease the building. Therefore, I am going to lease the building until I know for sure it can be used for the center. My question is should I go ahead an establish an LLC or should I lease under my personal name until I am certain the house will be able to be used as a childcare center.

In general, I don't recommend setting up an LLC in your home. When you rent or buy property outside your home it may make more sense to do so. Primarily because it's much easier to keep your business and personal records separate. A single person LLC is the best way to go if you do set up an LLC. I'd get the advice of a local lawyer before making a decision.

[usry2001]

Thanks for the response. This will be a second home used for a childcare center only. It WILL NOT be my primary residence. Do you recommend leasing and purchasing it under an LLC? BTW, I plan to lease until it is confirmed that it can be used for a center. Afterwards, I will purchase.

[LysesKids]

Thanks for the response. This will be a second home used for a childcare center only. It WILL NOT be my primary residence. Do you recommend leasing and purchasing it under an LLC? BTW, I plan to lease until it is confirmed that it can be used for a center. Afterwards, I will purchase.

Personally I wouldn't even lease a 2nd home until I knew it could be used for what I want; you are looking at an easy 12 month lease for what may be worth nothing including a tax deduction... do your research on centers for your state and then lease if it's possible and worth it for the area. State rules don't always apply if cities have stricter regulations... I was it out in a state I thought I could run licensed & it turned out every licensed HOME & center was out of city limits for a reason ( Eureka Springs, AR to be exact). City regulations can trump State including major cities in VA and AR

[TomCopeland]

lease/purchase

Thanks for the response. This will be a second home used for a childcare center only. It WILL NOT be my primary residence. Do you recommend leasing and purchasing it under an LLC? BTW, I plan to lease until it is confirmed that it can be used for a center. Afterwards, I will purchase.

I can't advise you on this decision without knowing a lot more about your particular circumstances and the finances of the center. Consult a local attorney and tax person for help.