LLC and Rental Properties .... What's recommended ??

[Michael Dunn]

I am looking to purchase my first Rental property within the next month or so 

So before I buy my first Rental property, I want to go ahead and find out if I should put each Rental I buy into an LLC at all ?

Or do I want to put every Rental that I buy into the same LLC ?

Or do I want to avoid LLCs all together ?

I have read various articles and heard opinions on both sides .... Some favoring LLCs and others saying that the cost to set them up can be Costly ( Depending on what state and or County you live in ) , so depending on this , sometimes it's not worth setting up individual LLCs.

I lie in the Desoto County,MS / Memphis,TN area , and from what I have found through researching both state's LLC procedures ..... The cost doesn't seem that high at all on a per 1 LLC basis . Now this is if you do it yourself, so I'm not sure how much a Lawyer would cost to MAKE SURE I set them up 100% correctly to protect myself and each propety(s) within an LLC.

Thank you for any and all help and insight on the topic at hand.

I just want to make sure I fully understand LLCs and if makes sense to go that route with my Rentals.

Thanks again 

[Jim Sirokman]

Hi Michael,

Before determining how you would like to vest your business and the assets contained therein, it may be a good idea to meet with an asset planning attorney. You should interview a couple before making a decision, and sometimes they will even have a CPA designation to discuss tax strategies too. You can kill two birds with one stone if they have those credentials. Depending on your state, you may choose to put each property in a land trust and hold them in an LLC partnership, but each strategy needs to be tailored to the type of investing that you are going to focus on. They will be able to discuss a wide range of strategies that should cover your risk position and how to use insurance as well. At the end of the day, I would want to know my full scope of risk exposure and associated risk mitigation strategy costs so I can decide which choice I'm most comfortable with. Spending a little money now on professional advice can go a long way into the future. I hope this helped and wish you luck!

Best Regards,

Jim