Q: Am I able to create an LLC to rent out a property I own (under own name) through a separate Property Management Company?
I created an LLC to accept payments from and to pay Property Management company on a property that is under my name not my LLC. I am just looking for general advice as to what the best practices are? Should I change the title/deed to the LLC or is it possible to rent my property using a Property Management Company with my LLC signing all of the agreements with said Property Management Company? I own the LLC and the Property separately but would contract the work out through the Property Management Company.
A:
You can hold the property in your own name or in the name of the LLC. When renting out property, it is often a good idea to place the property in your LLC and then do business with the tenants as an LLC. This includes having all payments go directly to an LLC account created with its own tax ID number. This process will help protect you in the event of a lawsuit. Other documents, like annual minutes and an Operating Agreement will solidify the LLC and make it less likely to be ignored in a lawsuit, making you personally liable.
One challenge to placing a property in an LLC is if you have a bank loan on the property in your personal name. Banks have been known to terminate a loan if the property is transferred out of the name of the person that signed the loan.
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