Do you use a separate LLC for each property?

The commonest question that people ask is that if someone owns multiple properties, is that person supposed to enlist all this under one LLC or should all the properties be classified under different LLCs. The simplest answer to this would be that each property should have been classified under separate sets of Limited Liability Company that owns one property, and is definitely not engaged with other business. This is for increasing the protection over every property owned. A simple example would demonstrate why it is important.

                       

Consider three people, A, B and C who own properties. Each of them holds 3 rental properties. A owned the properties in his name. B held the properties in the name of a single LLC. C held the properties under different LLCs. There was sudden damage in the rental properties owned by each friend. The tenants die. What happens next?

The first friend got sued by the family of the deceased tenant, lost all his savings, and he was blown to dust. The second friend, lost all his equity in the three rental properties, but other assets were still the same. The last friend lost the equity in the single rental apartment where the accident took place; the rest was covered and protected.

 The real estate companies know that keeping a limited liability protection is to eliminate risk that the investor faces, and one still holds on to the property despite the case of a mishap, also the life savings stay intact, and there is minor damage caused to other assets. In short, the investor is secured and covered, and protected from the mishap.

Not putting all eggs in the same basket would be advisable, as if the basket falls, all eggs shatter, which is an act of foolery. Wise people put every property under a different LLC, and overall secure themselves and their family from the risk of loss. If someone clubs all his property under a single LLC, then what takes over is loss of equity from all properties.

One might lose all the properties in the future if the person who is investing is not careful with the procedure of filing the LLC. Also all the income and expenditures come under different set ups, and it is easier and much conducive to the person who is handling the rent and the expenses. The work of book keeping becomes more convenient and there is practically nothing to worry about.If anyone interested to  invest in real estate property then A new Residential property in Joka, Kolkata - Godrej 7 seven properties. 

                          

Another benefit is that in future, if one wants to sell off the property, then it would be much better to sell off the entire LLC. This will prevent the investor from losing money on tax, and It would actually be more profitable as a transaction. 

A good real estate lawyer usually has knowledge of these transactions, and he or she usually guides people well through this. This strategy holds good for 10 properties. But for properties greater than 10, the organization could be messy and uncontrollable. For that, discussions with attorneys usually gives more insight and strategies.