Multiple LLCs

[Matt Morgan]

I'm wondering if it's a good idea to open up a different LLC for each rental property or is there too much headache to make it worth it? Also, I'm not asking on whether I should start an LLC vs an umbrella policy. Thanks in advance!

[Rob Beland]

I would say you will run into logistical problems just as @Linda Weygant has pointed out. It's enough to manage one LLC and one checkbook never mind three. There is no reason tax wise to keep three separate checking accounts. The issue people sometimes run into is commingling money in your personal account with your business account. As far as having three LLCs or one LLC, you could have one checking account for everything related to your rental properties. As long as you aren't paying personal bills out of your business account and vice versa you are fine. No real reason to keep three accounts except personal preference. Similarly there is no real reason to keep three LLCs unless you have different partners on different properties. In that case keep everything separate. If you are talking about three SMLLCs and you own everything, you don't really gain anything. Along with you LLC(s) look into liability insurance sufficient to cover your total equity. Don't worry about the value of your real estate since you likely have mortgages. Just be sure you are insured for the value of your equity. This is your exposure in the event you are sued.