Personal vs LLC

Should I Buy Under My Name or Through a Company?

A Key Decision for Any Real Estate Investor in the U.S.

Over the past decade, LLCs (Limited Liability Companies) have become a popular structure for real estate investors in the United States. However, while they offer many benefits, they are not necessarily the best option for everyone.

If you're considering how to structure your next real estate investment, here’s what you really need to know—clear and to the point.

✅ Benefits of Buying Through an LLC

1. Legal Protection:
   If there is a lawsuit related to the property, only the LLC’s assets are at risk—not your personal assets.

2. Tax Benefits:
   You can deduct operating expenses related to the property, including maintenance, insurance, and utilities.

3. Avoids Double Taxation:
   LLCs (especially single-member LLCs) don’t pay corporate taxes like other business entities. Profits pass through directly to the owners and are only taxed once.

4. More Efficient Estate Planning:
   The LLC doesn't “die” with the owner. This can help reduce inheritance taxes and streamline the transfer of assets.

5. Mortgage Interest Deductions:
   If structured correctly, a single-member LLC may be able to deduct mortgage interest.

6. Lower Costs Compared to Other Corporations:
   LLCs often have lower registration and maintenance fees than other types of corporations.

7. Foreign Investors Can Open an LLC:
   Unlike other business structures, non-resident foreigners can open and own an LLC in the U.S.

8. Flexible Profit Distribution:
   LLCs allow great flexibility when it comes to distributing profits among members.

❓ Should I Open One LLC Per Property?

The highest level of protection comes from having one LLC per property. This way, if there's a legal issue with one property, it won’t affect your other assets or properties.

However, many investors choose to place multiple properties under a single LLC to reduce formation and maintenance costs. Just be aware: this increases risk exposure across your portfolio.

💰 Estimated Costs of an LLC

• Formation cost: $400 – $700 (approx.)

• Annual renewal: Around $200 in Florida, up to $400 in Delaware

• Accounting fees: Vary depending on services and structure

• Tax return deadlines: Before May 1st (Florida), before June 1st (Delaware)

📝 What Do You Need to Open an LLC?

• Register the company name

• U.S. mailing address

• Names of members/shareholders (can be spouses)

• Company’s Articles of Organization (prepared by an accountant or attorney)

• Operating Agreement (prepared by an accountant or attorney)

⏱️ How Long Does It Take to Open an LLC?

• Florida: 3 to 5 business days

• Delaware: 5 to 7 business days

🏛️ Florida LLC vs. Delaware LLC

The key difference is privacy:

• In Florida, LLC ownership is public record

• In Delaware, ownership information is private

🔄 Bought Under Your Personal Name? Can You Transfer It to an LLC?

Ideally, plan your structure before buying. But if you already purchased under your name, you can transfer the property to an LLC. However, it’s crucial to consult with a CPA or real estate attorney to evaluate:

• FIRPTA applicability (for foreign investors)

• Transfer costs

• Whether the transfer is considered a sale (which could trigger taxes)

⚖️ LEGAL NOTE:

These matters are complex and should be evaluated with the help of a licensed CPA and/or real estate attorney. This information is educational and should not be considered legal or financial advice.

Summary:
Buying through an LLC offers legal protection, tax benefits, and estate planning advantages. It’s ideal for investors—especially one LLC per property—but involves costs. Always consult a CPA or attorney before structuring.