Property Management LLC

[Chuck Mace]

I want to run something by the community regarding property management and see if others have done something similar:

I'm in the process of figuring out how best to setup the legal structure for a long-term, buy-n-hold rental operation in New Hampshire. After consulting many professionals, and weighing many factors, my plan was to create per-property "holding" LLCs, and a single "property management and acquisitions" LLC to operate everything.

When explaining this plan to my insurance agent, he pointed out that if I formed a property management LLC, that entity would require it's own liability policy whose annual cost would be more than trivial. He also explained that in NH, the owners of rental property are able to manage their own properties without a license, and in the event a lawsuit was brought against them (or the holding LLC) due to property-management related issues, they would be covered via the property's liability policy. In other words, the owner/manager does not need an additional liability policy just for the management function, so long as there's no PM LLC entity.

This all sounds good, in that it's one less LLC and will save a non-trivial amount of money each year thanks to not needing the additional PM policy. However, I was also planning to use the Property Management LLC as the "face of the business". This is the entity that tenants would make checks out to. This is the entity that would have a website, and maybe a logo for business cards, envelopes, letter-head, etc.. When I explained this to my insurance agent, he suggested that I simply create a trade-name (or DBA), and use that as said entity. This would allow me to have the "operating entity" or "face of the business" that I desire, and still not need the expensive liability policy that's required if this entity is instead an LLC.

Does this seem like a sound way to go?

My goal is not to save a few bucks by skimping on insurance; Again, my understanding is that the additional PM LLC policy is going to cost several thousand dollars a year and bring little (or no) additional benefit.

Thanks in advance for any comments!