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Updated over 4 years ago on . Most recent reply
Do you use an LLC for you rental properties?
Seems like the trend is to use an LLC to buy and run rental properties. Like anything I guess there are pros and cons. Thoughts? Thanks!
Most Popular Reply
- Real Estate Broker
- Cody, WY
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That blog is a good primer. If you set up three entities, that will cost you at least $100 per. Then you have to file paperwork on each one each year, plus the taxes. If you pay a CPA to do your taxes, that can add up to a lot.
Most tenants sue because there's a dispute over the deposit, which means the most you would pay is 2-3 times the deposit. The odds of being sued are pretty small. The odds of losing your case is even smaller. The odds of your loss being greater than what insurance would cover is even smaller. The odds of the loss being so great that you have to sell all your properties and head to the poor house? I couldn't even calculate the odds.
Your best protection is to know the law, obey the law, treat your tenants honestly and fairly. Then I would consider an umbrella insurance policy to increase coverage over all your properties. The last step would be to set up a legal entity.
- Nathan Gesner
