Advantages of Creating an LLC For Your Real Estate Business

A Limited Liability Company (LLC) has extreme benefits for anyone looking to start their own real estate business. Here are the top three reasons why we recommend this route.

If your business gets sued, falls into bankruptcy or any other downfall, having your business formed under an LLC will protect your personal assets. That means that you [and your business partners] are only risking what is invested in the company. No one can come after your car, your house or your personal belongings. Of course, this doesn’t mean to run your business frivolously - there are repercussions to certain actions as owners are still liable for debts that have been personally guaranteed. The three things you should invest time in when establishing an LLC are:

  1. Helps protect your personal assets
  2. Make sure you obtain LLC insurance
  3. Make your LLC an independent entity
  4. Establish credit with your LLC
  5. Helps provide credibility for people looking to buy/invest
  6. An LLC is recognized universally as a more formal business practice vs. a sole proprietorship. The practice of forming an LLC is an official process that once registered provides peace-of-mind to the consumer. 
  7. Provides different tax benefits 
  8. Did you know the IRS allows an LLC to decide how they want their business to be taxed? That is, if you are a single-owner LLC. You can decide if you want your business to fall under the tax bracket of a(n): partnership, sole proprietor, S corporation or a C corporation. If you have multiple owners, you will be taxed as a partnership. This allows flexibility for your business to choose how you will be taxed federally.