The best practice for owners of multiple commercial or residential rental properties is to create a limited liability company or LLC for each of those assets.
If your LLC owns all of your properties together and a lawsuit arises against one of them, the penalty may be more than the value of that property alone. In this case, all other LLC assets may also be taken as part of the payment. If each property is held under a separate LLC, it is the LLC’s sole asset and the only one at risk in the case of a lawsuit.
If you also own a business operating within one of the buildings you own, it is wise to set up an LLC for that building separate from the LLC or corporation you’ve created for your business. You can then lease the building back to your company and pay rent to the LLC you’ve created for that building.
An LLC is the best choice for business structure in these situations because a corporation is subject to significantly more taxes whenever you sell the property. At Moschetti Law Group, we can assist you in creating a limited liability company to protect what matters.