Do i need an LLC for Rental Properties??

[Account Closed]

Hi BP family,

I am a UK citizen and am starting a property portfolio in the USA and was wondering whether or not i should go down the route of forming an LLC or just have the properties listed in my and my wife's name?

All the help is much appreciated and would love to hear the pros and cons of doing so.

Regards,

Sunny

[Edmund Ricker]

Hi @Account Closed

There is no right or wrong answer to your question. I would say that whether or not you need an LLC depends on your current financial situation. How much do you have to lose if you are sued by someone who "slips and falls" at your rental property?

How much leverage will you use in your property portfolio? The more equity you have the more an LLC might make sense.

Good insurance is necessary whether or not you have an LLC. The additional cost of a single member LLC is not significant, but it is an additional cost.

You can always start without an LLC and create one later. I would recommend you consult a trusted attorney who will give you an honest opinion of your exposure based on your current situation and how that exposure may change going forward.

Hope that helps.

Ed