Setting LLC vs Just home insurance

5 Replies

Hi,

Do I really need LLC and a Wyoming LLC to protect myself? My accountant told me I do not need to create all these entities just need to have good insurance for each rental. I feel like a nightmare managing each LLC if I starting to buy up more cheap rentals.

Any advice greatly appreciated.

@Sam Jiang Do not ask your accountant legal advice and don't ask an attorney accounting advice.

The benefits of Wyoming and Nevada LLCs are oversold. Most states will require you to register your out of state LLC if you own property or do business in the state. There goes your privacy and most of the benefits of these out of state LLCs.

Whether the cost and hassle of running an LLC is worth it to you will depend on the specifics of your situation. If you want to read up on it I suggest NOLO Press website and books.

Does anyone really get into law sue or this kind of LLC setup is overkilled? My friends and family own lots of properties but they never have anyone suing them all these 20 years. Just curious about real life data.

@Sam Jiang lawsuits do happen, but they are VERY infrequent (considering how many rentals and landlords are out there). And I’d imagine most lawsuits are against landlords who (at least somewhat) deserve it. If you maintain your properties and typically do the right thing, insurance should protect you from just about anything. Plus, remember that an LLC isn’t a magic shield.