Limited Liability Company Start Up

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@Shannon Sims , I work with over out of state 100 investors who own rental properties in Indianapolis. About 50% use LLC's and they are also usually the larger and more established investors. In the 5 years that I've been working in property management and the 8 years that I've been investing, I've never actually seen an incident where it was advantageous to hold the property in an LLC. Also, many banks will not lend to an LLC for the first property in a portfolio and will likely want you to hold it in your name for recourse purposes.

If you are the only owner of the LLC, the IRS classifies it as a disregarded entity, meaning that it will be taxes like a sole proprietorship (unless you fill out paperwork to request otherwise) so it probably will not offer any tax advantages at this point, but rental properties have a lot of tax advantages built in already.

I think that LLC's are important at some point, but I don't know if it is the most important consideration at this point. It's not a big deal and it's relatively inexpensive (about $100 in Indiana) so if it's important to you, then do it, but I don't think it will likely have a major impact on your current investment activities or position.