LLC for rental property
Many landlords hold a rental in an LLC so that a claim from a tenant or the property goes against the company rather than their personal assets.
What it does
The LLC owns the property and signs the leases. Rent goes into a business bank account. If you keep company money separate from your own, that separation is what gives the protection its weight.
Check these before you transfer the property
A mortgage may let the lender call the loan if the property changes hands, so ask yours first. Your insurance should name the LLC. Recording a new deed can cost money, and some places charge a transfer tax.
One LLC or several?
Some owners use one LLC per property so a claim on one can't reach the others. That also means a fee and a report for each. An attorney or accountant who knows your state can tell you what's worth it.
Questions
Which state should I form it in?
Usually the state where the property is. Forming elsewhere often means registering in that state anyway, and paying both.
Does an LLC lower my taxes on rental income?
Not by itself. A single-member LLC is normally ignored for federal income tax, so the income still lands on your personal return.
We're not a law firm or a tax adviser. This is general information, not advice for your situation.
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