If you buy and hold rental properties, please read on…
One of the best ways to build tax free wealth is through owning rental properties. You buy low, rent out the property for X amount of years, and if you decide to sell later, you can keep the profits or reinvest through a 1031. During the life of the rental, you have cash flow coming in, depreciation deductions, mortgage interest deductions, and the property grows year after year in value increasing your net worth. Love it!
As an investor who owns rental properties you may consider forming an entity.
You first have to ask yourself, do I need liability protection?
If the answer is yes, then you need to decide which entity is best for your rental. You should consult with an attorney on matters like this, but the majority of our clients form LLC’s.
An LLC will limit the investor’s liability in the event that something goes wrong under the investor’s roof.
We hope that this helps and if you have any questions, feel free to reach out to our team.