Best state for LLC for long term rentals

[Megan Stone]

Hi all, I'm preparing to establish an LLC for my property and future properties. What are the most favorable states in which to establish the LLC. I have read Wyoming, Nevada, Montana, south Dakota and Texas for various reasons including less fees and more favorable landlord laws.

thanks!

[Katherine Serrell]

Hi Megan! 

It doesnt matter what state you establish your LLC in, you still have to follow the tenant-landlord laws of the state that the property is in. For example, if you have an LLC registered in Wyoming and your LLC purchases or manages a property in Nevada, the Nevada tenant-landlord laws apply. So, if you are looking to get the benefit of investing in landlord-friendly states you have to own property, not just an LLC, in that state.

I am not a lawyer and I am not offering legal advice but just based on what I have been advised and heard of others doing .. As far as LLC formation, people normally just try and find the cheapest option or go with the state that they will be purchasing the properties in for transaction ease but its not required. As you mentioned, some states are more cost-effective than others when it comes to saving a few dollars upon formation, filing your annual return, business license/tax/privilege tax, and/or when you file your annual report. Delaware is a popular state to look into for that reason.