Are you interested in a real estate venture? Are you considering starting a new venture? If you are, you should consider establishing an LLC. An LLC is a business entity that can give you many advantages. It is going to protect your personal property, give you tax benefits, and afford you more privacy.
Establishing an LLC for Your Real Estate Venture: Reduce Personal Liability
As the owner of a real estate property, you can be held liable if an accident occurs on your property. If the injured person can show that your negligence contributed to the accident, you could owe thousands or even millions of dollars. This could cause you to sell the property to cover the costs. If you still owe money, you could be forced to pay from your personal funds. They could even take your own home.
So how do you protect yourself? The secret is to own nothing, but control everything. Transferring your real estate property to an LLC reduces your personal liability in case of a lawsuit. If the LLC is the owner of the property, the injured person must sue the LLC. Once the LLC’s funds and properties are gone, they can’t take anything more. Your personal funds and assets are protected.
Tax Benefits
There are also several tax breaks for setting up an LLC. By setting up an LLC, you can avoid double taxation. Your LLC will also allow you to take advantage of qualified business deductions. In most cases, you can take a 20 percent deduction on your business income for tax purposes. You can also deduct costs of advertising your property and maintaining it. Just be sure that you keep accurate records of everything. You don’t want to run into trouble with the IRS.
Establishing an LLC for Your Real Estate Venture: Privacy
There are many reasons that you will want to keep your personal information private. If other people find out that you own a property, you could be bombarded with spam and other business mail. By using an LLC, you can avoid having your name be put on the public records as the owner. Anyone that is trying to determine where the owner of the property lives will get thwarted. Instead, they will only be able to find the place of business. This can be extremely helpful if you have a tenant that gets angry with you.
Real estate is a great way to generate passive income. However, it can quickly turn into a nightmare if you don’t take the proper precautions. By setting up an LLC, you give yourself the ability to protect yourself from many of the things that can go wrong. This protection will increase the likelihood of your new venture working out.
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Steelbridge Realty LLC is a Licensed Real Estate Brokerage that utilizes cutting-edge marketing techniques and data-driven Real Estate solutions in today’s ever-changing environment. Our group of professionals have decades of experience and have navigated through many business cycles. Our diverse background gives us the tools to guide people towards successful decisions.
RE: Establishing an LLC for Your Real Estate Venture
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source https://northfortmyersonline.com/2020/07/03/the-benefits-of-establishing-an-llc-for-your-real-estate-venture/
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