LLC vs. Umbrella Policy

[Huyen Nguyen]

Hi everyone,

I am new to the community and also real estate investment so would really appreciate your help. I just bought a rental SFH in Atlanta and I am considering between LLC and Umbrella Policy for liability protection. While I understand the general difference between the two, I still do not know which one is better for my situation (as I am owning only 1 investment SFH). Would appreciate any advice that is offered on what to choose in my situation.

Many thanks,
Huyen

[Tyler Anderson]

For a lot of people starting out such as you and me, a new LLC can't get financing so even if you had an LLC the property would be under your name (unless you paid cash through the LLC for the property and didn't need financing). So even though I'll have an LLC so that I can split income between myself and my partner, I'll still have umbrella coverage because the property is in my name and the LLC may not provide any/enough protection.