LLC for real estate investors
A tenant injury, a contractor dispute or a mortgage default on one property should never threaten your other properties or your home. Holding rental property in an LLC — often one LLC per property or a series LLC where available — is the standard way investors ring-fence that risk. The LLC also makes partnerships with co-investors clean and transferable.
At a glance
Incofile forms property LLCs in all 50 states, obtains the EIN for the bank account, provides the registered agent in the property's state and prepares the operating agreement that lenders and title companies ask for.
One LLC per property, or a series LLC?
Separate LLCs give the strongest separation but multiply filing fees. A series LLC (available in Texas, Delaware, Nevada, Illinois, Utah and a number of other states) creates protected "cells" inside one LLC at lower cost, though not every state and lender recognizes the structure. Many investors start with one LLC for a small portfolio and split as values grow.
Which state should hold the property?
Form the LLC in the state where the property is located. An out-of-state LLC must register as a foreign LLC in the property's state anyway, so the "Wyoming holding" structure only helps when you add a parent LLC on top of property-state LLCs for privacy or estate planning.
Financing, transfers and due-on-sale
Transferring a mortgaged property into an LLC can technically trigger the lender's due-on-sale clause; in practice many lenders consent, and investors increasingly use commercial or DSCR loans made directly to the LLC. Title insurance and property insurance must be updated to the LLC's name. Talk to your lender before deeding the property across.
Taxes for a property LLC
A single-member LLC is disregarded: rental income and depreciation flow to your personal return as before. Multi-member LLCs file a partnership return and issue K-1s. Non-US investors in US property use the LLC for liability but should plan for FIRPTA, estate-tax exposure and the Form 5472 filing — a US tax adviser is essential.
Which state should you choose?
What Incofile does for you
- Form the LLC in your chosen state
We prepare and file the formation documents, act as organiser and provide the registered agent in that state — your home address stays off the public record.
- Obtain the EIN
We apply to the IRS for your Employer Identification Number so you can open the bank account and set up payments.
- US business address and mail scanning
A real US street address for banks, marketplaces and payment platforms, with every letter scanned to your portal ($155/year).
- Operating agreement and banking resolution
The documents banks, Amazon, Walmart and payment processors ask for, prepared in your company's name.
- Compliance calendar in your client portal
Annual report deadlines, registered agent renewal and tax-filing dates, with reminders before each one — plus 24/7 access to every document.
Ready to set up your LLC the right way?
Transparent one-time pricing from $0 + state fee. Real humans answer your questions by email and chat, and your client portal shows every step of the filing.
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Real Estate Investors — frequently asked questions
Can I move a property I already own into an LLC?
Yes, by deed. Check your mortgage terms first, update insurance and title, and record the deed in the county. Transfer taxes may apply in some states.
Does an LLC lower my property taxes?
No. Property tax follows the property. The LLC is about liability and ownership structure, not property-tax savings.
Do I need a separate bank account for each LLC?
Yes. Mixing funds between LLCs or with personal accounts is how courts set aside the protection.
Will my lender allow it?
Many do with notice; commercial and DSCR lenders lend to LLCs directly. Ask before transferring.
Can non-US investors use an LLC for US rentals?
Yes, and most do. Plan the tax side (FIRPTA on sale, estate tax exposure, annual Form 5472 and 1040-NR) with a US adviser.