Should I get a Business license?

Question

Hey guy's!  Just wanted to get some insight as to what I should do. I have been learning a lot for the past year... year and a half here on Bigger Pockets and will be looking to find a property for primary residence towards the end of the year and will be renting out the Condo I currently have a mortgage on. Was wondering if I should get a business license and put the unit under the business name or just keep it in my name? I do plan on having more units in the future. Financially now I could afford both, but at some point, once I accumulate more properties I'm assuming I will need an LLC? Thanks for your time everyone.

Michael Hood · Answer

Thanks for the input Zac, I tend to think worst case scenarios also. Would rather protect myself in case of the what ifs...Appreciate your time.

Zachary C. · Answer

@Michael Hood,

It's kind of a person preference on when to start a company, at least I know some people do start under their own name. The whole point of having the property under a company is to protect you and your other assets (like that new primary you are looking to get) from liability of the rental property. There are also tax reasons for doing this, but the most important for me is protection in the worst case scenario. I started with my first property under a company for this reason, sure the odds of something happening go up with more units, but I wouldn't want to get caught by surprise because I only had one unit and didn't take precautions. Insurance is another buffer to all that, but again I am considering worst case scenarios when making that decision. Some people put each property under a different company and some cluster multiple under one company.

Good Luck