Should I get my LLC?

[Ronny Perez]

Should I get my LLC before buying my first rental property? I have read that you should get it before buying your first property and others said that is not necessary. I am afraid of getting the LLC and having to pay taxes if I don't have a property.

[Ned Carey]

@Ronny Perez it is not such a simple question but you won't pay any taxes if you don't make any money in the LLC. the exceptions is any taxes required by the state just to keep the company active. In MD that is $300 a year.

Generally LLCs don't really affect the amount of taxes you pay. They are there for Liability protection. They don't offer as much protection as you might expect. But I wouldn't nor an attorney I know would own a property without an entity like an LLC.

An LLC is easy to create and can be created when you buy your first property. LLCs do take time and cost to run and will make financing harder and more expensive.