Should you put your rental property into an LLC?
There are differing opinions on whether or not you should put your rental property into an LLC. Generally, we recommend not to put your rental property into an LLC and, instead, make sure you have good insurance including an umbrella policy.
Justin: With rental properties, while the tax advantages of an LLC are minimal. Would you want to have a rental property in an LLC? What about multiple properties? Would they each be in their own LLC?
Attorney Tom Olsen: Well, that's the question because you're going to spend money to set up and maintain an LLC, Justin, but before you thought about putting a rental property into the LLC, number one, you want to call your insurance agent and make sure that they would insure it if it's in an LLC. Then, number two you need to get permission from your lender to do that and either one of those things usually stop people from doing it.
Justin, if you've accumulated wealth through rental property, your best defense is to be well insured, including having an umbrella policy. Generally Justin, I recommend that you be well insured including an umbrella policy and not put your rental properties into an LLC.