All Forum Posts by: Ben Bagnall

Yes, you should. There are plenty of talking points on this topic but no need to overcomplicate it: you don't want any one unfortunate event, accident or oversight to put all your personal assets at risk. Insurance is great, but liability coverage will have a limit and there could be certain situations excluded from your coverage. The primary benefit of an LLC is that it limits your liability to the value of the assets owned by the LLC (i.e. the property you buy, plus any additional properties you add to the same LLC later). No seizure of personal assets, no wage garnishments and no personal bankruptcy from a lawsuit arising at one of your properties as long as the LLC is properly formed and maintained. Between the LLC and the coverage from your rental property insurance policy, you'll have peace of mind that you're well protected.

If you want more resources on this topic, I would recommend Brandon Turner's The Book on Rental Property Investing. Chapter 16 addresses this question specifically.  If you want a deep dive, I would recommend Garrett Sutton's Loopholes of Real Estate.

Don't feel as though you need to be an expert on the topic in order to form your LLC. There are service providers who make setting up and maintaining an LLC a streamlined and well-guided process. I've used Corporate Direct to set up my LLCs and Prime Corporate Services is a similar company I'm familiar with as well.