Should I put Single Family LTR in LLC

[Elliott Beckstrom]

Hi! 

I have a property in Denver that I'm renting out long term. I got a letter from my mortgage company that said I can move the title into an LLC if I like without triggering the due at sale clause.

This is the only property I own in Colorado and am curious what advantages I will have by putting it in an LLC outside of limiting my liability. If anyone is versed on tax benefits or implications I'd be interested in hearing that as well.

Please let me know your thoughts. 

Thank you, 

[Jason Malabute]

From a tax perspective, there typically isn't a significant advantage. As a single-member LLC, the IRS considers it a disregarded entity, meaning the income, expenses, and other tax-related items will still be reported on your personal tax return via Schedule E. So, it won't offer you any tax savings on its own.

However, one of the primary reasons real estate investors place property into an LLC is for liability protection. If something were to happen with the property, such as a lawsuit from a tenant, having it in an LLC can help protect your personal assets from being at risk.