Most real estate investors in the USA own their properties within a Limited Liability Company (LLC). LLC are a cheap and efficient way to protect your liability. Stateside APM can establish LLC’s in most states and also prepare operating agreements as well as apply for and receive the tax ID number (EIN) from the IRS.
Owning a rental property in your own name exposes you and your worldwide assets, should you be sued. If someone got injured whilst on your property, you would be liable and they could sue you for damages. If you own the property in your own name, they would sue you personally and would therefore be able to sue you for your total wealth, which may include your own home and any other investments you may have.
However if the property is held in an LLC they would only be able to sue the LLC as that is the legal owner. Therefore the only assets held by the LLC would be the property and the bank account, thus greatly reducing your exposure.
The cost of setting up and maintaining an LLC is very small compared to the protection it affords and we would always recommend owning rental or holiday property within one.
Certain countries revenue services do not recognize LLC’s and where this is the case other entities are available which offer the same protection.
Each LLC requires its own bank account to ensure that the limited liability protection is maintained. These US bank accounts are becoming increasingly difficult to obtain, for non-resident beneficial owners. Stateside APM have worked very closely with a local bank in Michigan and are able to open bank accounts for most nationalities. Our bank account come with online access, debit cards and checks.
Please contact our LLC and bank account department for full details of our terms and conditions.