registering real estate property on LLC or Trust vs individual

[quincy]

thank you.
The property is a second home, not vacation home. The question is not really about insurance since it will be covered by it disregards been owed by llc or individual. The Insurance will be a landlord type insurance.
The question I need an answer for can be rephrased as following:
Can titled under LLC real estate property provide additional extras In term of protecting my other assets against possible liability related to it if compared to titled under my name when both having 1 million liability coverage insurance?
Basically llc vs individual ownership both having the same insurance in just narrowed Subject of liability protection when potential claims don’t go over insurance maximum coverage.
does owing it under llc provide some extra protection? Or does it only when insurance liability coverage limit is overreached?

Do you have a mortgage on this second home?

An LLC can provide liability protection so your personal assets are not endangered, if the LLC is structured properly. LLCs are often used by owners of rental property.

The bottom line, however, is that you will want all specifics (e.g., your financial information, the property information, how the property will be used) personally reviewed by a professional in your area to see if an LLC is, first, your best option and, if so, for help setting up your LLC.

 

[Al999]

Do you have a mortgage on this second home?

An LLC can provide liability protection so your personal assets are not endangered, if the LLC is structured properly. LLCs are often used by owners of rental property.

The bottom line, however, is that you will want all specifics (e.g., your financial information, the property information, how the property will be used) personally reviewed by a professional in your area to see if an LLC is, first, your best option and, if so, for help setting up your LLC.

No mortgage. I know that llc provides liability protection. Doesn’t insurance liability coverage do the same? Why would rental need double protection Let’s focus just on this matter?

 

[doucar]

A single owner LLC or a multiple owner LLC does not protect you or your assets, if you are found to be negligent in causing the damage. The fact that you could be sued, even if your assets are protected by the LLC, you could still spend thousands of unrecoverable dollars defending the lawsuit and proving the protection. That is why liability insurance is always recommended because it will pick up the cost of defense.

 

[quincy]

No mortgage? I know that llc provides liability protection. Doesn’t insurance liability coverage do the same? Why would rental need double protection Let’s focus just on this matter?

Do you currently own this second house or are you just thinking about purchasing a second home?

The reason I asked about a mortgage is that it is difficult (but not impossible) to transfer a home with an existing mortgage to an LLC.

The major benefit to establishing an LLC for real property is it puts a wall up between you/your personal assets and the property in the event of a lawsuit. But insurance is always necessary, whether the property is held by an LLC or by you.

Because there is far more involved than just deciding to establish an LLC or not, you should sit down with a professional in your area to discuss the pros and cons of each option available to you.

 

[Al999]

A single owner LLC or a multiple owner LLC does not protect you or your assets, if you are found to be negligent in causing the damage. The fact that you could be sued, even if your assets are protected by the LLC, you could still spend thousands of unrecoverable dollars defending the lawsuit and proving the protection. That is why liability insurance is always recommended because it will pick up the cost of defense.

Great. Means if I am sued for damaging renter’s property or health then My assets including my savings protected by insurance. The question remains what does the factor of having title been under llc protects regarding my assets?

 

[quincy]

Great. Means if I am sued for damaging renter’s property or health then My assets including my savings protected by insurance. The question remains what does the factor of having title been under llc protects regarding my assets?

Here is a New York guide to structuring a business and it lists the pros and cons of each:

http://www.nyc.gov/html/sbs/nycbiz/downloads/pdf/educational/legal/business_legal_structure.pdf

No business structure is going to protect you from your own negligence. If, for example, your house is held in an LLC and the LLC rents out the property but you negligently start a fire in the house, you personally can be held liable for any injuries and damages suffered.

 

[Al999]

Do you currently own this second house or are you just thinking about purchasing a second home?

The reason I asked about a mortgage is that it is difficult (but not impossible) to transfer a home with an existing mortgage to an LLC.

The major benefit to establishing an LLC for real property is it puts a wall up between you/your personal assets and the property in the event of a lawsuit. But insurance is always necessary, whether the property is held by an LLC or by you.

Because there is far more involved than just deciding to establish an LLC or not, you should sit down with a professional in your area to discuss the pros and cons of each option available to you.

no. I didn’t purchase it yet but about submitting an offer. Also I googled and found standard articles saying about standard practice of having llc for rentals, but then I found one guy saying that purpose of llc is overestimated and only brings headaches and that he has 17 rental properties and having insurance only is just enough. No real benefit of llc since each property can have 2 millions coverage and if that is not enough then add umbrella coverage. So I want to hear 2nd opinion since he has rare opinion.

 

[doucar]

Did you read my post? Whether you have an LLC own the property or own it yourself, you need insurance if you don't want to pay from your own funds the thousands of dollars always have insurance.
With the LLC you will have annual fees to pay to your state and annual filings and a possible separate tax return if you elect to have the LLC taxed as a corporation. Perhaps this is what he was looking for.

 

[quincy]

no. I didn’t purchase it yet but about submitting an offer. Also I googled and found standard articles saying about standard practice of having llc for rentals, but then I found one guy saying that purpose of llc is overestimated and only brings headaches and that he has 17 rental properties and having insurance only is just enough. No real benefit of llc since each property can have 2 millions coverage and if that is not enough then add umbrella coverage. So I want to hear 2nd opinion since he has rare opinion.

Are you submitting a cash offer or will you be mortgaging the property?

Insurance is vital. LLCs have their place, however, and can provide an added layer of protection for the owner of rental properties. It will be how you intend to use your particular property that can determine if an LLC is what is best for you.

 

[LdiJ]

OK. I can rephrase my original question to this.
What extra can titled under LLC real estate property provide In term of protecting my other assets against possible liabilities related to it if compared with having 1 million liability coverage insurance on titled under individual name real estate property?

Personally, I think that good liability insurance does more to protect assets than an LLC or Trust.