LLC for rental property

A limited liability company is the standard pass-through vehicle for holding rental real estate.

The pitch: lawsuit protection (a tenant can sue the LLC, not you personally), pass-through taxation (no entity-level tax), and clean separation of business books. The reality: forming an LLC is easy, but maintaining it correctly (separate bank accounts, formal lease in LLC's name, registered agent, annual filings) is where most landlords slip. Note that personal-name conventional mortgages can't be transferred to an LLC without triggering the due-on-sale clause — consult a real attorney before transferring titled property. Many small landlords skip the LLC and rely on landlord insurance + an umbrella policy.