Owning rental property can be a good source of income and a good investment for the future, but they come with some liability risk. People that own even one or multiple rental properties should take some asset protection measures. A good idea to protect the properties is for each rental property to be owned by a separate limited liability company for “LLC”.  Therefore, property #1 would be owned by LLC #1, property #2 would be owned by LLC #2 and so on.

Articles of Organizations would need to be filed with the Department of State for each company that is created. For each rental property, a deed would need to be prepared and signed transferring the property from your individual name to each of the different companies. The process for setting this up is not very timely and the costs are not substantial. The possibility liability issues that could arise would signicantly outweigh any of the setup costs. The benefit is that you get sued in your individual name (for example because of a car accident or the like), then the plaintiff or creditor would not be able to seize the different rental property to satisfy their claim. Also, if someone slips and falls on one of the property and sues, then they cannot go after the other rental properties which are owned by the different entities.  For example if a party gets injured on property #1, then they can only sue LLC #1 and not all of the other companies or yourself individually.  To make sure that the plan is properly implemented, each company will need to have its own separate bank accounts to receive the rents. Also, a lease agreement would need to be done between each tenant and the different companies that owned the respective properties.