pros and cons of renting a house as LLC vs as an individual?
*Please contact an attorney for the best advice on LLC’s
Here is my opinion
An LLC is ESSENTIAL for a number of reasons. No particular order.
1. Your personal assets are shielded in the
event the LLC is sued and/or held liable. A
judgement against the LLC will not show on
your personal credit or attach to a home in
your personal name.
2. Let’s say you fall behind on your real estate taxes. The government will try to collect these taxes from the owner. Where I live they will file civil charges against you. This will follow the LLC and not YOU personally. Again shielding you from liability.
3. Another example is when it comes to fines. If the house is in your name and your tenants get a fine, it generally comes to you and then you have to go after the tenant. If you don’t pay the fine, or forget about it, you could be criminally charged. But if the house is in an LLC name, they can’t criminally charge any individual who is not the owner.
So, in general, an LLC separates you personaly from the rental property as two distinct entities.