Tip #261: Cover Your Assets
One of the easiest ways of doing this is to incorporate in a business form like an LLC.
Lawsuits abound in the rental world, from slip and fall to bedbugs, secondhand smoke to crime. In many cases, a landlord can shield any personal assets not related to the rental property in the event of a lawsuit.
If you have multiple properties, some experts suggest forming a separate corporate entity for each property. If you have the option, it may be most effective to form the entity prior to purchasing the property, or prior to incurring a mortgage.
To learn more, see our post Forming a Real Estate LLC, or speak with your accountant or legal advisor.
See last week’s Landlord Quick Tip.
American Apartment Owners Association offers discounts on products and services for all your property management needs. Find out more at www.joinaaoa.org.