LLC or not to LLC

[Taylor Campbell]

Hi - what are everyone's thoughts on getting an llc on rental properties? I have heard a lot of conflicting advice on getting one. I have heard some recommend it, other's say the liability insurance should cover it, and then other's say to get them when you have more properties. Thanks!

[Stuart Udis]

I am a strong advocate for asset protection and utilizing a deed holder entity is recommended. However, most fail to operate the entity properly and that's where issues generally arise. It's also good to loop in your accountant before the formation is completed. Depending on where you live, there may be certain tax benefits to owning real estate as a Limited Partnership as opposed to an LLC or even how you are admitted as a member of the entity. This generally has more to do with local taxes but good to spend some time up front to make sure you are addressing both asset protection and tax planning properly.