Rental Corporate Structuring

COVER YOUR ASSETS! : When renting out your property, beware of the LIABILITY EXPOSURE

Whether you’re renting out one or multiple properties, you now have a business. With that business comes LEGAL EXPOSURE. That’s the risk you take being a business owner.

To protect yourself, you need an effective asset protection strategy that ensures you have the correct rental corporate structure. Here are a few of the common mistakes rental property owners make in this regard:

• One of the biggest mistakes rental property owners make is holding the title of the property in their own personal name. Now, your tenant sues, and all of your personal wealth is up for grabs in the lawsuit. Your bank accounts, your home, your kids’ college funds
• The second most common poor choice I see is holding the title of the property in a Revocable Living Trust. Now, your tenant sues, and all of your personal wealth is still up for grabs in the lawsuit. Your bank accounts, your home, your kids’ college funds. Estate planning is not designed to protect you from the public, it’s designed to protect your estate from the state government upon being deceased.
• The third wrong move I see that’s becoming increasingly more common is holding one or multiple titles in an LLC and renting to tenants through the LLC. Now, your tenant sues your LLC, and the property is held by the LLC, so the property is up for grabs in the lawsuit along with any other title being held in the same LLC.

It’s 2025. It’s not ‘if’ you get sued. It’s ‘when’ you get sued. So, when you get sued, will you lose everything you’ve worked so hard to build? Not if you take the time to create the correct corporate structure for your portfolio. Every corporate structure is unique to the individual. There are ‘limits’ to even corporate veils created through holding company structuring. Speaking with an experienced Asset Protection Attorney on what’s best for your holdings is the best way to ensure you’re Covering Your Rental Assets! 

Becoming a business owner, you control your own destiny, choose the people you work with, reap big rewards, challenge yourself, give back to the community, and you get to follow your passion. Knowing what you’re getting into is smart business because the responsibility of protecting your business falls on you.

For more information on how to legally start and grow your business please visit our website at BaglaLaw.com. Call Bagla Law Firm, APC. today and set up an appointment to obtain your “Legal Roadmap” today!claimer:

This information is made available by Bagla Law Firm, APC, High Net Worth Business Law Firm, for educational purposes only as well as to give you general information and a general understanding of the law, and not to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.