My husband and I own two pieces of property that we rent out. One is rented to our daughter, and the other is rented by a business that we both own. We are considering purchasing more property as rentals but feel we should form a business to protect our personal assets. what is the best business structure for us to manage these rental properties?
Generally for small or closely held businesses such as this you'd want to form an LLC. In the business of owning and managing rental properties you may want to form an LLC for each property you obtain (having the LLC own the property and thus limiting the liability and scope of risk to that 1 property) and then have an LLC that operates as the management company for these properties that you have obtained.
You should contact a business attorney in Florida who will be able to explain this structure in more detail. It is likely worth the legal fees to get it set up properly and limit your liability as much as possible.
Legal disclaimer: The answer provided above is for general information purposes only and should not be relied on as specific legal advice. This answer does not form an attorney-client relationship. You should consult with an attorney of your choice to fully advise you about your legal rights and obligations.
Car / Auto Accident Lawyer
Like many legal questions, the initial answer is It Depends. What are your primary goals? Tax benefits? Asset protection? Succession planning? Are you planning to own many income producing properties or are you planning to sell them after a certain amount of capital appreciation? What is the character of the properties and the tenants (i.e. are these luxury homes, slums, something in between)? Do you anticipate hiring employees to manage these properties? Are the properties single family homes, commercial, multifamily units, etc.?
My point is that your approach is dependant on both your business plan and your overall financial & estate plan.
If convenient, I like using LLCs for every one or two properties for asset protection purposes; but they are only effective to protect you from them, not them from you. So, there is more planning to be done, if asset protection is your goal. See? We attorneys can make seemingly simple questions into quite a bit to think about. But, it's because we have seen or heard about the worst that can happen, and we want to help you to be prepared.
Do you know the consequences of your legal situation on your Financial & Estate Plan? Dennis Phillips is an attorney and financial planner based in South Florida. He is a member of the Florida bar, he holds the nation-wide Series 65 Investment Advisor license, and holds an insurance license in Florida and Virginia. Disclaimer: The response above is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that, if known, would significantly alter the above response.
Construction / Development Lawyer
Generally speaking, a corporation is the wrong choice because of bad tax treatment on passive income. An LLC is usually a good choice and seems like a good choice based on the limited information you provided.
Look for a local business attorney on Avvo and discuss your objectives with them.
IF YOU FOUND THIS ANSWER HELPFUL PLEASE MARK IT SO. The answers provided by R. Russell O’Rourke, Attorney-at-Law as a free informational service only. Without thoroughly reviewing your case neither I nor any other attorney can give you a complete answer upon which you could or should rely. Your reading of this or any of my answers does not create an attorney client relationship between us. Legal cases are often very fact specific and need a qualified attorney to properly review ALL of your materials and fully discuss your case with you before you decide the right course of action to take. YOU SHOULD CONSULT WITH AN ATTORNEY IN PERSON who has specific expertise in the area of law you are asking about.
There are three types of real estate ownership commonly used in Florida to protect the assets of real estate investors: a limited liability company (LLC); a limited liability partnership (LLP); and a Florida land trust. You should consult an experienced real estate lawyer in your area to determine the type of ownership that is best for you.
Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.
Most of my clients would do a 2 member LLC .
It would best to meet with an attorney for tax elections
and how many LLC's to form etc.
The answer given does not imply that an attorney-client relationship has been established and your best course of action is to have legal representation in this matter.