NB: Make certain to consult your attorney or your CPA to find the options that work best for you.
Whether you currently own a few investment properties in the Atlanta area or you’re thinking about buying a home that you’ll rent out to tenants, you might be wondering how to structure it. Owning rental homes is the same thing as owning a small business. Are you able to protect yourself? Can you make sure you’re earning as much as possible without losing money on surprise expenses?
At Clients 1st, we aren’t attorneys giving legal advice and we aren’t financial planners giving you money advice. In fact, we’re not giving advice at all - just information. We are professional Atlanta property managers, and we have long-time experience leasing, managing, and maintaining rental properties in Atlanta.
Most people don’t think about the various ways to own an investment property. If you’re looking for options, these are some of the ways we have seen successful investors own and succeed with rental property. For help with your own investment portfolio and business structures, remember to always consult your attorney or your CPA.
Atlanta Rental Property and Trusts
Some investors choose to place their investment properties into a living trust. These are the best reasons to do that:
Real estate taxes are generally lower and you can avoid probate. You can more efficiently transfer title to your heirs without lengthy court hearings.
Having the rental property in a trust will effectively separate your personal assets from your business assets, protecting your personal wealth from lawsuits and claims.
You’re protected with a living revocable trust if you become incapacitated. Should you become ill and unable to properly manage your own finances and property, another trustee can be selected to manage your trust to protect your real estate.
Setting up a trust can be complex and expensive. You’ll need legal help as well as advice on whether you’re placing only your real estate assets into the trust or other assets as well.
Atlanta Rental Property and an LLC
A limited liability company (LLC) is perhaps one of the most common ways that investors structure their rental property business.
The primary reason to buy and hold your investment in an LLC is that it protects you from liability and lawsuits. Imagine the worst case scenario: a neighbor drowns in a pool at your rental property or a tenant falls down the stairs and requires medical attention. As the property owner, you may be the target of any lawsuits or insurance claims.
When you own the property personally, you and all of your assets are fair game in those lawsuits. But, when an LLC owns your property, your personal liability is limited. Claimants and plaintiffs cannot come after your personal finances or assets in a lawsuit. They’d be suing the LLC, not you.
If you have not already considered the different ways in which you might protect yourself while renting out property in Atlanta, talk to us at Clients 1st Property Management Specialists. We can provide you with more information to take to your attorney and CPA for consultation.
The Clients 1st Team brings you decades of combined real estate industry experience and over 30+ years of experience in property management in metro-Atlanta and the surrounding areas. Our award-winning team provides quality, reliable services for our homeowners, buyers, sellers, tenants and investors.