How to put long term rentals into LLC

Question

Quickest way to put single family home rental into LLC. Recently had a tenant's friend slip and fall. Worried about asset protection. Also best type of insurance. We have rental permit, lease. Live in Florida but own properties in NY.

Allan C. · Answer

Do some research on whether a single-member LLC (or LLC with spouse) will even be sufficient to protect you. Also do research on what's required to properly manage a LLC so the veil cannot be pierced.

Brandon Rizzo · Answer

Agree with the above commenters. The actual mechanism for moving the LLC would be best to consult an attorney or tax professional. Many investors that I have worked with utilize quitclaim deeds or other ways to transfer ownership after the fact, but like David said you need to make sure it will not jeopardize any financing, etc. You also wouldn't want to create a cloud on the title, so doubling down and working with a legal professional/attorney would be best advised.

David Kanarfogel · Answer

Is the property financed? That would make this much more complicated, since you'd likely need lender approval.In any event, you'll want to check your mortgage (if you have one) and the lease to see if you can transfer or assign. If no mortgage and/or if the mortgage and the lease doesn't restrict assignment, then you can set up an LLC, warranty deed the property to it, and assign the lease. Just keep in mind that there are further steps you'll want to keep to minimize the possibility that your entity is ignored for this kind of personal liability (say, if you were the person who didn't properly clear snow, or if your finances and the LLC's are comingled).

And I agree with @Chris Seveney, insurance may provide adequate protection based on what's available to you.

*All posts on this forum are for general educational purposes only and should not be taken as comprehensive legal advice. Every real estate investment is unique, and you're strongly encouraged to consult with an attorney to ensure your specific legal needs are properly addressed.

Chris Seveney · Answer

Just get really good insurance is my recommendation.