State of Incorporation - local vs. NV or WY?

1 Reply

I have read conflicting advice on what state to incorporate an LLC in to hold investment property. Since most people recommend one LLC per property I am concerned about annual filing fees adding up, especially in some states. I have property located in FL, DC and MA where fees can be high. I hear some people say "incorporate where the property is located" ($500/yr in MA) while others say "incorporate in NV or WY where annual fees are only $75/$110 and asset protection is better". How important is it to incorporate in the state where a property is located and why? Thanks!

Well can't speak for other states but in MA you will definitely have to register the LLC from another state as a foreign entity doing business in the state.

So just have to pay extra fees and do multiple filings on the same entity.

Also it says you are from Boston so no matter where your stuff is the LLC is a flow though entity so you will be paying MA state income tax on all the income from all the states. Even if you aren't living here you will still pay MA tax on the ones here even if the LLC is incorporated in another state.

Pretty sure that the registration stuff will be the same for any state that you have a property in, though the tax stuff will vary.

More or less the only people I have ever heard say it is a really good idea to incorporate your entity holding title to real estate in a place other than the state where it is located are the people that are selling those services.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here