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Updated 23 days ago on . Most recent reply

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Jason Lopez
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Do I need an LLC for my rentals?

Jason Lopez
Posted

Hi, to all. I'm wondering if is necessary to have an LLC to rent a house here in San Antonio, Tx. In addition I heard that is better having one LLC for each property and one for management only. Can someone help me to get in track on this? Thank You.

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Philip Barr#1 New Member Introductions Contributor
  • Attorney
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Philip Barr#1 New Member Introductions Contributor
  • Attorney
Replied

Typically, it is best to have an LLC own a rental property to limit liability from reaching you or your other assets. Real estate is a high-risk asset when it comes to liability, and nowadays, plaintiffs' attorneys can bring large lawsuits against you that go beyond the value of the property itself or insurance payments. I like to think of compartmentalizing liability like limiting a flood on a naval ship. There are compartments to seal off to prevent the flood from reaching vital areas of the ship and sinking it. Same thing with liability, you want to place the rental property in an LLC to prevent liability stemming from it reaching you or your other assets that you have obtained and built. In Texas, you can set up a Series LLC and have each series under the parent LLC own a rental property in Texas if you have several. It is a great, cost-effective way to achieve asset protection.

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