Protecting Yourself from Lawsuits as a Rental Real Estate InvestorEven if your rental properties hold the best of tenants, real estate investors are never fully immune from lawsuits – even ones that may be frivolous. So, it is important that you protect yourself…just in case.

One way to do so is to own your real estate investments through a Limited Liability Company, or LLC. An LLC is a type of “hybrid” business entity structure that combines the characteristics of a corporation with those of a sole proprietorship or a partnership.

As an investment property owner, setting up an LLC can be a smart move. One of the primary reasons for this is because it can effectively separate your assets, in turn, reducing your liability risk.

For instance, if you own your real estate investment(s) as an individual, it is possible that if lawsuits are filed against you – even if it is just in regard to your property – your personal assets could also be at stake. However, if your property is owned by an LLC, then only that property will be at risk.

There can be other benefits, too, if you own rental properties via an LLC. For instance, you can enjoy the benefit of “pass through” taxation. Before you set up an LLC, though, it is important to follow the rules that pertain to Florida (or other state where your property is located), because creating an LLC can differ somewhat from one state to another.

Managing and maintaining rental property can be a time-consuming endeavor. So, if you’re looking for a way to still benefit from your real estate investments, but would rather delegate tasks like collecting rent, fixing leaky roofs, and responding to tenants’ emergencies, it may be time to consider hiring an experienced property manager.

If your rental properties are located in Orlando and / or the surrounding Central Florida area, give us a call and let’s talk about how we can make your life as a real estate investor easier.