Renting a house - should I form an LLC?
Asked by: g storm - 24 February, 2012
I am renting a house to someone, what is my advantage in obtaining a LLC?
I am renting a house to someone, what is my advantage in obtaining a LLC?
Answered by: Robert Kowalski - 24 February, 2012
Dear G. Storm,
When you are renting your real estate property to a tenant you accept certain degree of liability in case something happens and your tenant decides to sue you. In case of a judgement being not in your favor all your assets could potentially be used to satisfy it.
This is the reason many asset protection specialists recommend forming an LLC for each of the rental properties and transferring the title of the property to this LLC. This way in case things go south the tenant would have to sue the LLC, and the judgement can only be satisfied by the assets of that LLC, which in this case would be the property held by the LLC and nothing else.
To learn further I would recommend you to consult an attorney specializing in real estate and asset protection.
Dear G. Storm,When you are renting your real estate property to a tenant you accept certain degree of liability in case something happens and your tenant decides to sue you. In case of a judgement being not in your favor all your assets could potentially be used to satisfy it.
This is the reason many asset protection specialists recommend forming an LLC for each of the rental properties and transferring the title of the property to this LLC. This way in case things go south the tenant would have to sue the LLC, and the judgement can only be satisfied by the assets of that LLC, which in this case would be the property held by the LLC and nothing else.
To learn further I would recommend you to consult an attorney specializing in real estate and asset protection.
