Main Content

Home » An LLC for Rental Properties

An LLC for Rental Properties

Although I am a real estate agent, I never wanted the hassle of owning rental property. My husband and I recently met with a financial planner, who advised that our two rental properties (purchased by my husband before our marriage) should be in an LLC (limited liability corporation).

An LLC for Rental Properties

We would primarily create an LLC for our rental properties as it limits our liability. If a lawsuit is brought against the LLC, it would only affect the LLC. Ideally, we would create two different LLC’s one for each rental. Then a potential lawsuit would only affect the one. As we manage our rentals, our assets, such as our home, could be used to pay for damages if we lose a lawsuit. If we create an LLC for our rental properties, the only assets at stake are those owned by the LLC. Thus, if we made one for each rental property, in the event of a lawsuit, only the LLC and the property covered by it would be subject to claims.

This is my takeaway from my meeting. You should consult your CPA and an attorney if you are considering this. As with anything, there is always a downside.

Related Posts: Being a Landlord is not Always Easy 
Los Angeles Housing Market Trends


One thought on “An LLC for Rental Properties

  1. Matt says:

    I have family members that own rental properties. They all use the llc system it seeems you have been given sound advice

Leave a Reply

Your email address will not be published. Required fields are marked *