How & is an LLC required for a Vacation Rental

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How & is an LLC required for a Vacation Rental

Noelle Maine
Carolina, RI · Member since 2016 · 4 posts · 7 votes

I am looking to purchase my first vacation rental in another state and am wondering if I should get a traditional LLC or a Series LLC and do I need to contact an attorney to set it up for me. Do I setup the LLC in the state that the property is in (NH) or my home state (RI)? I would appreciate any help as I am hoping to start on the right foot from the beginning. Thank you so much!

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Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
6y

@Noelle Maine Most folks will agree no need for any kind of LLC if you're financing. If you're paying cash go ahead and throw it in an LLC and worry about series on the next one. The LLC can be formed in any state you wish according to a quick google search. Had to refresh my memory on that one.

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  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    6y

    @Noelle Maine Most folks will agree no need for any kind of LLC if you're financing. If you're paying cash go ahead and throw it in an LLC and worry about series on the next one. The LLC can be formed in any state you wish according to a quick google search. Had to refresh my memory on that one.

    Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6y

    You do not need an LLC especially if this is your only property or if you have a mortgage on the property.

    Your first line of defense is insurance. You could also add an umbrella policy if you want another layer of protection.

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  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    6y

    Which states are set it up and it's something you should ask an expert, not asking. In most States, the LLC should be in the state of the property.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    6y

    People act as if an LLC is necessary to invest. The vast majority of investors will never be sued. The vast majority of investors own property in their own name. Even if you are sued, and if you are found guilty, the average payoff will be covered by your insurance.

    LLCs are pushed by lawyers. Umbrella insurance is pushed by insurers. Don't use these as an excuse for not investing.

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  • Nicolas Dulac
    Real Estate Agent · Portsmouth, NH · Member since 2019 · 4 posts · 2 votes
    6y

    Hi Noelle,

    I am a real estate agent and investor in New Hampshire. I work with a lot of investors and some have LLC's and some use their name. Some loans don't qualify when purchasing with a LLC depends on the loan. (Make sure you ask your loan officer)

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  • Richard Dale-Mesaros
    Investor · Campton, NH · Member since 2010 · 285 posts · 143 votes
    6y

    When considering what entity to use, it makes sense to look at it from four perspectives:

    1) Entity/legal protection against lawsuits?

    2) How does an insurance co view it?

    3) How does it impact your ability to get funding?

    4) What are the tax implications?

    In other words, run the decision by your attorney, insurance co, lenders and accountant!

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