Looking to buy my second rental property should I get a LLC?

Question

I currently have one rental property and I am looking to buy more. should I continue to buy more real estate in my name or create a LLC? Looking for some advice on pros and cons

Jevon Shaw · Answer

Pros for buying in an LLC:

1. Enhanced protection against legal disputes.

2. Increased privacy. For example in Texas, who owns what property is public information, but if it is owned by an LLC, people will see the LLC instead of your name

3. Potentially easier to separate personal income and expenses from business income and expenses

Cons:

1. Loans will be more expensive.

2. Loans may be harder to obtain.

3. Smaller items may be more complex, such as taxes and purchasing with partners outside of the LLC

Mike S. · Answer

This questions has been beaten to death on this forum already. A quick search will give you pages and pages of answers.

Short answer: it's up to you. It depends on the risk you are willing to assume. Some are not using LLC, other like me are using one LLC per property, and you have plenty in between using the same LLC for multiple properties.

A very good primer on asset protection for real estate investor is the Clint Coons Youtube channel where you will find hours of relevant content.

Richard Bechtol · Answer

Hi Christian,

There is generally a lot of information out there about LLC's and whether or not they are needed. I think that they serve an important role in liability protection and can help protect you.  With that said a Series LLC is good if you are looking to scale your business and acquire additional properties over time.

The benefit of the Series LLC is that, generally, you have all of the benefits and protection of multiple LLCs, with a lower maintenance cost that would be similar to having a single LLC. There is some variation among the different States that offer the Series LLC, but you will likely only being paying for a single registered agent and single annual State compliance (if applicable). Maintaining a Series LLC will be easier than having multiple LLCs, but slightly more complex than having a single LLC.

Looking to buy my second rental property should I get a LLC?

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