Question: I own two rental homes and a four-plex apartment
building in Wickenberg. The rental agreements are signed by me
individually and the rental checks from the tenants are made payable
to me individually. Should I form an LLC for each rental, or should
I form one LLC for all of the rentals, or can I carry on as I
am?
Answer: I would strongly recommend that you form an LLC
for each rental property. For example, if one of your rental properties
has a serious mold problem and you have that rental property in
an LLC, only that LLC would be liable for any multi-million dollar
judgment for the mold problem as opposed to all of your rental
properties and your personal assets being liable. Even if you
have liability insurance for the rental property, the coverage
may be limited or non-existent for the mold problem, or the liability
insurance carrier may go out of business. For example, Kemper
Insurance Company is a major liability insurance carrier that
is in serious financial difficulties at the present time.
