First rental property - LLC?

[Alexander Churchill]

What's up BP! I Live in PA and I'm buying in the area I live in . I'm In a contract on my first rental property. It's a 2 unit side by side double. I've been getting mixed advice on setting up an LLC on the property and if so that I should do it prior to closing so I don't have to transfer. Any advice on if I should set up LLC for just owning one property at the moment? I'm looking for Pros and cons and alternative suggestions!

[Thomas S.]

About 50% of investors will set up a LLC for real estate investing. Insurance coverage with a umbrella policy will provide the same protection. Additional protection, with or without a LLC, comes from investors not holding equity in your properties. Equity is a lawsuit magnet.

You will get both sides however you will likely not hear from anyone that has actually been protected from a suite by having a LLC protected their assets. Insurance is your first line of defence with or without a LLC.

Down side is it makes financing more difficult, banks will still require personal guarantees on mortgages, and you will incur additional costs and book keeping with a LLC.

A LLC is psychological security for those living with the fear of litigation.