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The Biggest Advantage and Disadvantage of an LLC PowerPoint PPT Presentation


Do you own at least one investment property and are interested in forming an LLC - limited liability company? Many investors choose to go this route because of the asset protection that it provides, but it doesn't mean that this is the best choice for your specific situation.

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The Biggest Advantage and Disadvantage of an LLC

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The biggest advantage and disadvantage of an llc

The Biggest Advantage and

Disadvantage of an LLC

Do you own at least one investment property and are interested in forming an LLC - limited

liability company? Many investors choose to go this route because of the asset protection that

it provides, but it doesn't mean that this is the best choice for your specific situation.

Before you make your choice, you must delve deeper into this subject, weigh the pros and cons,

and consult with an expert. To get you started on your journey, this guide is here to shed some

light. So, without further ado, here are the biggest advantage and disadvantage of an LLC for

your real estate investment:

Biggest Advantage of an LLC: Asset Protection

Everyone knows that LLCs are a great way for entrepreneurs to protect their assets, but this is

especially true for real estate. Say for instance,

one of your tenants gets injured on the

property. In order to pay for damages, he or

she will probably sue you.

In this situation, an LLC will protect your

personal assets - this is because the personal

liability of your property is held in the entity

itself. Any additional liability beyond that is

the responsibility of the LLC and will not affect

any other assets.

Alternatively, if the property is listed under your name, you will not be afforded this protection.

In other words, your personal assets may be in danger if you are deemed responsible for the

injury.

Also, it is important to note that, there are specific situations where asset protection isn't fully

guaranteed, you will need to consult with a professional to ensure that you are always in

compliance with Nevada law.


The biggest advantage and disadvantage of an llc

Biggest Disadvantage of an LLC: Fees

Of course, the specific amount you will have to pay will be dependent on several factors that

include the lawyer that you hire and Nevada state law. Still - no matter the circumstances - you

will have to shell out some cash to turn your investment property into an LLC.

Furthermore, because you are essentially creating a business, you will have to pay some of the

fees associated with this process. Some of them

include:

●Set-up costs

●Yearly fees

●Filing separate tax returns, requires the

assistance of an accountant

The Bottom Line

Although there are many advantages to be had by placing your real estate rental property

investment under the umbrella of protection provided by an LLC, your final decision should be

one made after careful consideration. Consult with a professional who specializes in real estate

investing, like the ones at RAM, to ensure that this is the right step for you.


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