Is an LLC the best option?

13 Replies

In the majority of possible investment scenarios, an LLC is the best option for rental property owners. How many of you transferred your properties to an LLC? 🤔

I have used an LLC for all but one of my properties. I like the liability protection that comes from separating out the businesses. If one takes a loss, it shouldn't spill over on to the other ones. There is also the benefit of having an extra layer of anonymity that comes from having the LLC own your properties. This will probably vary state to state. I have transferred my first property from personal to an LLC. It cost about $800 with an attorney.

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@Cristin Rakestraw , creating an LLC for your rental property is a smart choice as a property owner. I will suggest also suggest you do some research then go from there.

Goodluck and make it happen!

Originally posted by @John Duston :

Typically, yes. LLCs are a tool for liability protection that we often use.

AND, don't forget to consult with your insurance broker too to ensure you get the proper insurance coverage as well. That is wall of defense 1, LLC is wall 2.

Originally posted by @John Duston :

@Will Barnard

Exactly. I often advise clients to get professional advisors as line 1.5

 Good point John, that is probably line of defense 1 in front of my 2 walls mentioned above! Excellent advice.

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@Thomas Kwan : You will go to a commercial banker, just ask to speak with one at your local bank. You will be getting a commercial loan. Terms will be less favorable as the limited liability protects you but makes it more risky for the bank.