Congrats on being close to getting your first renter for this property, Kat!
You’re asking great questions about LLCs, also known as limited liability companies. This legal entity is a favorite amongst landlords – in TurboTenant’s October 2024 survey, 44% of landlords said they used an LLC to structure their rental property management business.
But why?
According to TRUiC, “Since real estate investing involves plenty of capital (i.e., the property) and unique risks, an LLC crucially separates your private and business dealings. Creating an LLC for your rental property business can reduce your liability, minimize your risks, and ensure that your real estate investment keeps running smoothly.”
In other words, an LLC limits your liability by separating your business risks from your personal assets. It’s also relatively easy to set up, especially compared to other complex corporate structures.
As far as tax implications go, I’m happy to share my research though I must stress that I am not a tax expert! With that disclaimer out of the way, many folks enjoy LLCs because they automatically benefit from pass-through taxation – aka, the LLC’s profits pass through to each owner’s individual tax return without the LLC being taxed as a business entity.
I’m curious about what everyone else thinks, too! What’s been your experience with LLCs?
-
So very tue! you get several tax breaks and protections!
-
I have an LLC for my business bank accounts and that’s the name I use for my business dealings. However, all my properties are under my own name, only because the mortgage officers always told me it would be too complicated to buy a house under my LLC. I’m still hoping to re-finance my properties into my LLC some day.
