As any rental property attorney will tell you, every investment comes with a certain amount of risk. Owning rental property can generate both monthly cash flow and long term growth.
One way to ensure the success of your investment is to protect it. A rental property attorney can help you understand the risks and how you can insulate both yourself and your property from risk.
This guide will show you five benefits of having an attorney help you with your rental real estate investments.
1. Structure Your Ownership
You need to structure the ownership of your rental property in a way that protects both you and the property. If you leave the ownership of the rental property in your name, then it’s a personal asset that’s at risk of any personal issues you encounter.
There are several options available to you. A rental property attorney can explain your options with the pros and cons of each.
- Holding company
- Single LLC for all properties
- Individual LLC per property
2. Protect From External Risks
If your property is in your name, then it’s at risk of outside lawsuits. For example, if you get into an accident and injure someone, then your personal assets could be at risk.
This would include your investment rental property. Without the right protections in place, you could lose your rental property assets to pay for the damages of your car accident.
Your attorney can help you protect your investment by protecting it from creditors or legal disputes. This shelters your rental property from outside and unrelated legal claims.
3. Protect From Internal Risks
When you own property, there is a certain amount of risk that you accept. Your attorney will help you insulate your rental property from your other assets. This is important should someone get injured while on your property.
Without the proper protections, the injured party can bring all of your investments and personal assets into the claim. Your rental property attorney can help you protect each of your properties and personal assets. This limits the injured party to a single piece of rental real estate.
4. Decrease Your Tax Liability
Your tax liability and benefits change based on how you classify the ownership of the property. As most smart investors, you’ll want to maximize your benefits while decreasing your tax liabilities. Your attorney will help you understand the consequences of how you’ve set up your rental investment.
- The way the property is titled
- How it is rented
- When you sell the property
- Whether you buy another property
- How long you held the property
5. Avoid Tenant Lawsuits
Your rental property is supposed to be a financial investment. This means it should help you grow your wealth. Having a tenant file a lawsuit against you will have a negative impact on your efforts.
A rental property attorney goes beyond the real estate transaction and assists in creating the proper legal documentation for becoming a landlord. This includes creating an application that follows fair housing laws and a lease that complies with landlord/tenant law.
The last thing you want is to risk your investment because you unknowingly violated a requirement placed upon you as a landlord.
Protect Your Property With the Help of a Rental Property Attorney
Whether you’re looking to invest in your first property or have several properties in your portfolio, a rental property attorney can help you. It’s important to protect your investments by consulting with an attorney. They can show you how to structure the ownership, protect yourself from risks, and maximize your tax benefits.
Contact our firm today and let our skilled attornies help you protect your investment.
