It depends on how much asset protection you're looking to gain and if you are taking the deal down with financing. If you buy in an LLC and want financing, you limit the banks that will lend to entities. In that case, a big umbrella policy might be your best bet in the short term until you have more to protect.
@Angelo Pozzuto even if you had an LLC you should still purchase in your own name for a better rate, then transfer into your LLC. Lots of banks will not lend to an LLC especially if you do not have documented history in the LLC. Regarding if you should get an LLC or not, it really depends on your level of risk and how much protection you want. If your name is on the property and they are writing rent checks to you, then you would be names in a lawsuit and your personal home etc on the line. AP is about creating degrees of separation and barriers for plaintiff's lawyers to jump through, to waist their time and money, and to see they have nothing to collect on anyways. You decrease the incentive for somebody to sue you. It's not intentional acts that tend to get you, its the unforeseen, not expected incidents that you don't plan for, and negligence.
From a federal tax perspective, there isn't a difference in whether you hold the property through a single member LLC or individually.
As @Matt Motil mentioned, it comes down to 1) asset protection, and 2) financing.
Most people will point out that you can largely protect your assets with adequate insurance. Of course you would have to make sure that you actually do have a large enough insurance policy as it is impossible to predict how much you might eventually be sued for. Also keep in mind that an LLC provides two-way asset protection. It not only protects your personal assets from liabilities originating with the rental property, but your rental property from liabilities that are unrelated to the rental.
In terms of financing, banks do not like lending to LLCs on residential properties if the LLC does not have a track history. However, if you will eventually want to use an LLC it is important to start generating a track history.
If you don't have a reason to form the LLC don't do it. It adds time, cost and complexity that you probably don't need starting out. Insurance and a large LTV is probably good enough asset protection for starting out.
As you buy more you don’t want to own anything but you will want control everything. LLCs and trusts can help then.
@angelo pozzuto Here is a graphical representation of your quest:
Well if you're an accountant, you should know the accounting side of that question. A lot of it will depend what state you live in too. And then for more details on considerations-
There's a ton in the comments also.