If you own your own business, chances are you have a limited liability company (LLC) or, at the very least, you know what that is. Business owners may choose to buy a home using an LLC or under
Buying Real Estate Under LLC
If you own your own business, chances are you have a limited liability company (LLC) or, at the very least, you know what that is. Business owners may choose to buy a home using an LLC or under their own name. Buying a home through an LLC is beneficial for two main reasons:
Reason No. 1:Homeowners can maintain some privacy because the LLC is listed as the property owner.
For buyers who don’t want nosy people to be able to locate their addresses in public records, buying a home with an LLC is the preferred way to acquire property.An LLC prevents a buyer's name from entering the public record.
Reason No. 2: Owners have more protection in the event of a lawsuit.
If you own your residence in your name (as most people do), someone who’s injured on your property can sue you directly.
While homeowner’s insurance will cover the payments on a successful lawsuit up to a certain point, your other assets––including your savings, investments and home equity––could be garnished to pay the rest of the damages.
However, if you own your home in an LLC, then the lawsuit can only name the LLC, and the only assets that can be used to pay off the suit are those assets held in the LLC (which usually would just be your home.)
If you’re considering buying a home with an LLC, it’s important to consult an attorney and a tax advisor with experience in your state. You need expert advice to understand the implications of buying property under this type of ownership.