Real estate SP/DBA, LLC, of Corp.?
If you noticed, I posted a recent question concerning a potential rehab I am looking to acquire for the purpose of renting. This would be my first investment of this type. If it goes well I would like to continue to make similar investments.
Should I form an LLC or Corporation through which I should handle these properties, or would it be best to do them under just my name? What are the benefits/drawback to each?
Most Popular Reply
The benefits are that an LLC or corporation can (if used correctly) provide asset protection and potentially some tax benefits.
The drawbacks are that they cost money to form (some states are very inexpensive, some are more expensive), they require extra paperwork (like annual tax filings), some lenders won't finance property held by a corporate entity, and if used incorrectly, they may not provide any asset protection or tax benefits.
I'm sure there are other benefits and drawbacks, but those are the basics.
If you plan to set up a corporate entity, consult a tax professional and an attorney to make sure you're getting the benefits...