I am wanting to start buying rental houses to hold onto for the long term, not flipping. I'd like to get your advice on what type of entity you set up for best tax benefits, and liability protection from lawsuits. Also, do you think a 1 million umbrella policy is adequate in the early stages for liability?
Hoping to get started soon. Any advice is appreciated.
Also, a single member llc is treated as a disregarded entity as far as taxes go right?
Someone else told me to buy it in my name, and to get an umbrella policy also in my name. Then create a property management company and create an llc for that and to run everything through the llc as an S Corp.
I just want to do it right from the start, and to understand the benefits of why I'm doing it that particular way.
Regardless of what entity you choose, there is no substitution for paying for the proper amount of insurance. No entity can shield an individual from liability if such things as disregard of safety factors, an individual's actions causing bodily harm to another, etc..
Whatever entity you set up, remember to strictly follow proper procedures for such entity and purchase a sufficient amount of insurance! Insurance is the key for protection from liability regardless of the entity chosen for tax purposes.