Is LLC necessary to rent out ADU in the backyard

[Kristine O.]

Hi investors. It's my first time to rent out my converted garage to ADU soon as a midterm rental. It is my primary residence. Do i need to set up an LLC for that in case issues arise?

[Kristine O.]

Quote from @Chris Seveney:

Quote from @Kristine O.:

Hi investors. It's my first time to rent out my converted garage to ADU soon as a midterm rental. It is my primary residence. Do i need to set up an LLC for that in case issues arise?

Always recommend speaking to counsel but not sure what the LLC would do for you. If you have them act as your property manager, then the property management firm would need to be licensed, insured and bonded. Plus if you got sued, they sue the company and the person who they think did something wrong (you) - which goes to another point of over 2M people on BP and not one can share a story of when someone got personally sued by a tenant unless they did something really dumb.

I would get an umbrella insurance policy to cover you though. 

Thanks Chris for your input.