Where should an LLC be formed regarding an investment property- in the state whereit is located or in the state where the property owner resides?

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Where should an LLC be formed regarding an investment property- in the state whereit is located or in the state where the property owner resides?

We are buying a vacation rental propertyfor investment/personal use in another state. Our realtor mentioned putting it into an LLC just prior to the closing. Should the LLC be in the state we reside in, where the property is, or does it matter?

Asked on November 13, 2011 under Real Estate Law, Virginia

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You should consult with a real estate attorney about placing the rental home you are buying in a limited liability company or not rather than your real estate attorney. If you have adequate insurance for the vacation rental property that you are buying for liabilty purposes, there really is no basis for putting it in a limited liability company.

All that would result would be additional needless costs for you. Good luck.

 


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