Reasons to Own Rental Properties in an LLC

We highly recommend that title to rental properties be in the name of a limited liability company LLC. While there are some disadvantages, there are mostly advantages: (1) personal assets are almost always protected from tenant claims and claims of contractors and vendors, (2) an LLC is treated as a pass-through entity for state and federal income taxes, (3) owning rental properties in an LLC creates credibility with lenders and others, (4) It is usually easier to obtain insurance at a competitive cost for properties held in an LLC, and (5) operating agreements can provide maximum flexibility for the individual investors. A real estate attorney can provide all advantages and disadvantages for each form of ownership. See: (1) Holding Title to Real Estate in California. (2) Affordable Living Trusts.