Why do I need an LLC???

[Travis Buck]

I live in TEXAS. Not sure if the laws are different here. I currently own 3 rentals and hold them in my name. I am not sure if I need an LLC. I have good insurance policies in place as well as an umbrella policy. I have a grasp on the basics of what kind of protection an LLC provides. If I get sued, the plaintiff can come after me personally even with an LLC in place. Not much protection but gives a layer of anonymity. Also, What tax advantages are available to me with an LLC? I have all the standard write offs, depreciation, I pay my kiddos $6k each. And this year some of my W-2 income was tax free because I had a small loss with my real estate. What else is there???? I don’t want to pay a cpa thousands of dollars for something I am already doing. Thank you all.

[Jay Helms]

@Travis Buck - not sure about in Texas but in FL, the property has to be titled to the LLC to provide any coverage. Which if you have any loans in your personal name could cause some problems. If you own your properties outright, then a quit claim deed for $100 can title the property into the LLC.

Sounds like you're making all the right moves, especially with the umbrella insurance policy. At least the way I do them :)

And you're correct on taxes. If you had an LLC, you'll pass all rental income / expenses through your personal, so no real advantage over what you're already doing. The main reason to create and hold properties in a LLC is to help limit your personal exposure and for personal asset protection.