Why You Should Always Buy Property in a LLC

Chris at Hauseit (https://www.hauseit.com) goes over the critical reasons why home buyers and investors should always buy property in a LLC vs directly in their own names.

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It's important to buy properties in a LLC, especially if you plan on renting them out as an investor. It's a common fallacy by most home buyers to think that they are fully covered from any and all possible risks and litigation as long as they have home insurance. The more savvy ones think they are even more covered when they buy an umbrella excess insurance policy on top.

However, few of these buyers actually bother to look through the fine print of the policy, or have had to make major claims before. Because if they realized how the insurance industry works, they'll realize that insurance companies are in the business of collecting premiums, not making payouts on claims.

As a result, there are just too many examples or cases where an insurance company will decline to pay a claim on something that a homeowner thought would be covered by insurance.

This can be disastrous if the claim is very large, i.e. you are faced with a major lawsuit and you are personally named. In this case, if the claim is much more than the value of the house itself where the incident happened, then you could be sued for your entire portfolio. That means your individually owned stocks, other houses you might have and so on.

Therefore, it's always best practice to buy real estate, especially rental property, in a LLC. At the very least and in the worst case if you were to lose a large lawsuit, the other side could only go after the assets of the LLC. In fact, this concept of limited liability through a limited liability company is one of the founding tenants of modern capitalism.

Watch our video to learn more about why you should always buy in a LLC, especially if you plan on or even just might rent out your home in the future.
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https://www.hauseit.com

Save money when buying, selling and renting real estate in New York and Florida with Hauseit (https://hauseit.com). Available in NYC, Long Island, the Hudson Valley and South Florida. Est 2014.

Hauseit Group LLC, Licensed Real Estate Corporation
Tel: (888) 494-8258 | https://www.hauseit.com
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