Why You Should Hold Your Rental & Investment Property in an LLC

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Why You Should Hold Your Rental & Investment Property in an LLC

Purchasing a rental property can be a great way to add real property to your investment portfolio. While land and housing has traditionally been a very safe investment, there are still steps you must take to protect your personal finances and shield yourself from liability in the event that something goes wrong.

One of the simplest and most common ways to achieve that level of protection is to hold your rental or investment property in an LLC. Continue reading to find out about the benefits an LLC can have for you.

Liability Protection

LLC owners are generally protected from personal liability, including from some business debts and civil lawsuits. This can ensure that payment disputes, personal injury claims, and landlord-tenant problems do not harm your personal bottom line or embroil you personally in costly lawsuits.

Partial Anonymity

You may not want to have your personal identity associated with your rental property if you are making this purchase for the purpose of having a passive stream of income. An LLC can allow for personal anonymity, which is ideal if you do not plan on being a hands-on landlord or the face of the property.

LLCs Are Simple To Setup and Maintain

It is easier than ever to set up and maintain an LLC. The cost is generally less than the cost of forming a corporation, the structure of an LLC may be able to save you significant money on your taxes and/or tax preparation, and the record keeping rules for an LLC are far from burdensome.

The bottom line? When purchasing an investment property, it is crucial to take steps to shield yourself from personal liability. The licensed real estate lawyers and business lawyers at Walden, Neitzke & Kuhary, S.C. can help you protect your legal and financial interests.