Should I Start and LLC Before Buying and Investment Property

[Eric Struben]

I am new to real estate investing and would like to buy and hold rentals. I am wondering if it is best to set up and LLC, get a business accounts and business credit cards before actually buying a property? I want to keep my personal finances and rental property finances as separate as possible so I am thinking yes. Any advice or experience with this is awesome! Thanks!

[Ali Boone]

I 100% think setting up an LLC before you invest is putting the cart before the horse. For so many reasons. If you want to keep the finances separate, just create a separate checking account for the rental properties. That's what I have- an account where all the mortgages go out of and all the rental income is deposited into. There's nothing other than rental property money in and out of it. And then an umbrella insurance policy will cover liability issues for the property (which is what everyone thinks they need an LLC for).

The LLC, business credit cards, and businesses accounts are huuuuge overkill when you're just getting started.