Rental property under an LLC : ezLandlordForms

r

Rose W

started a topic over 10 years ago

I have two condos that I rent out, someone told me that I should have them under an LLC. Why should I do that?

M

Matthew M

said about 8 years ago

LLC's are great if you rent commercial properties. As for residential properties, the building insurance is typically more than enough to protect your personal accounts.

J

Jonathan N

said over 9 years ago

What governs where you must set up the LLC? We have rental properties in several states and just created the LLC in the state in which we live (are residents). We have not transferred any of the properties as yet. Thanks for 'quitclaim' tip.

F

Francis G

said about 10 years ago

I guess things are a little different in MN. It cost me $50 to set up the LLC and $50 a year to renew it. I also don't pay anything more for doing my taxes. I went to a 3 day seminar on buying/owning/renting property. In the seminar they quoted a major research firm that polled the next generation(the ones that can't get take their hands off of their cell phones). They were asked how they would get rich in their lifetime. 97% said they would sue somebody. Not sure if an insurance umbrella would protect you from that.

J

John B

said about 10 years ago

I disagree, I would suggest getting an insurance umbrella that has a lot of coverage instead of setting up an LLC. The LLC will cost you more: $200 initial setup, assuming you do it yourself and don't hire someone to do it for you. You also have to renew it every year and pay more every year to have your income taxes done. The lender might also not be happy if you transfer the deed to an LLC.

F

Francis G

said over 10 years ago

It is a great idea to set up the LLC. It protects you and you can set it up so that the taxes are passed through to you(simplified terms - file as you normally do) and you don't have to file as a company. Win-Win if you ask me.

D

Derrick D

said over 10 years ago

An LLC is a company entity. This does help protect you so that if something legal happens you cannot be personally sued. The LLC would take the hit. It is a good idea.