One of the most important reasons to get an LLC (limited liability company) is that it limits your liability, if you were ever to have a lawsuit filed against you, your assets wouldn’t be at stake. Only those owned by the LLC would so in other words the only asset at risk would be the rental property itself.
If you have multiple rental properties, it is a good idea to keep them separate from each other and have unique LLC’s for each property. That way if you were to have a lawsuit filed against one of the properties the others would remain untouched by the lawsuit.
When you create an LLC, you should also create a separate bank account for that LLC. This way you can more easily keep your business and personal expenses separate. This will make keeping track of your rental operating expenses much easier when filing your taxes!
