Should I set up an LLC for a rental property?

[Devaunshi M.]

Hi everyone,

A friend recommended I join this network, and i am so glad I did! I’ve been learning a lot from all of you - so thanks!

I am about to buy my first property that I plan to rent out. I am a bit confused as to whether I should set up an LLC for protection on top of having a solid insurance policy. If someone (God forbid) were to sue me for any reason, could they come after all my assets if I don't have an LLC? I want to make sure I am protecting the assets that me and my husband have worked hard to create.

Any advice would be much appreciated!

[John T.]

Have LOTS of insurance. If a tenant or other person has an action against your corporation, LLC or other type of business entity, they will certainly sue you in your individual capacity as well. Believe me. The will. So, its best to have LOTS of insurance.

After you get LOTS of insurance, then hire an attorney to give your advice relevant to your specific State.  Don't skimp on legal fees.  Pay now or pay a whole lot more later.  Your choice.