Suggestions for a STR LLC strategy

[Patricia Andriolo-Bull]

Hi. I understand the pros and cons in general of LLCs. I know often times people on this forum say they are unnecessary and don't always protect against liability and just get a good umbrella policy. That said, I do have significant personal assets I don't want to put at risk so I have one LLC for my two rental properties and keep all accounting separate. I understand that having two in one LLC puts both of those at risk. Here's my question, I'm looking at purchasing a 3rd property. Together with the other two, the value of the three will be ~$2.3M. I'm thinking it might make sense to start a separate LLC for the 3rd property but the thought of the work and costs associated with it alone makes me reconsider. I'd also have to get a separate liability policy so another expense. I'm in FL so I can't do a series LLC. Thoughts or recommendations?

[Collin Hays]

An LLC is cheap and does offer protection. However, I always caution that, if you are using the LLC as cover for being negligent in providing safe accommodations, it will not protect you. Ultimately, your LLC isn't the entity ensuring that your property is safe for guests; that responsibility falls to you and/or your management company. If there is a claim on your property, be ready to demonstrate and defend your care in minding and managing risks. Whether or not you have an LLC, if you are found to be grossly negligent, it could be you that is writing the check for the judgement, and depending on the state, it can be up to four times actual damage.