Limit liability between individual properties and myself.

[David Duong]

Hi -

Getting my first SFH property in my name. Since it's my first property, I haven't set up a business structure. How do you limit liability as a landord for your tenant's neglience?

Heard some folks say get renter's insurance and other's say get an insurance umbrella coverage. A few investors I talked just haven't plain thought about it. Just worried someone might sue me as the landlord owing to my tenant's neglience.

[Bryan Hancock]

Renter's insurance won't help...you aren't renting. You need an owner's policy (my is a fire policy) and an umbrella policy is nice to have too.

A legal entity is useful too for liability protection and sometimes for tax advantages. I have generally seen people use LLCs or FLPs for holding property. You may check into using a series LLC too...I am planning on possibly switching to that for my rentals going forward and I think Rich Weese uses this too.

This is a discussion you should have with an attorney. People on a message board may be able to help point you in the right direction, but your personal circumstances may influence the setup one way or the other. Umbrella coverage in a simple entity are a good place to start.