Should I form an LLC for each rental property?

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This question really comes down to cost vs. benefit analysis.

I myself set up a new LLC for every property I purchase.

*Remember: you need to setup your LLC before you purchase your property! Watch this video to make sure you don’t make this mistake.

Not only does this strategy of each property owned by a different LLC protect my personal assets, but it also separates each property from the others.

Story time…

Let’s say that I have 3 houses. The first house (house #1) is owned by LLC #1, the second house is owned by LLC #2, and the third house is owned by LLC #3.

If a tenant slips and falls at house #1 one and sues LLC #1, my properties owned by LLC #2 and LLC #3 are protected from that lawsuit.

Aside from the extra liability protection I also like to keep my books in my finances extremely organized.

For each LLC that I form I also have a new EIN and a separate bank account.

That means all of my income and expenses for each property sits within its own bank account and therefore is very easy to see which property is more profitable that the others, pay bills, and manage finances.

If on the other hand, I had one LLC that owned all three of the properties I would have to rely on my bookkeeper and/or my property manager to differentiate which property brought in income and which expenses were attached to each property. This makes both keeping and finances a little bit more cumbersome.

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Selling the LLC instead of the property (avoiding transfer tax)

Another benefit the having each house owned by a different LLC is that if you decide to sell the property in the future you have an alternative for an exit strategy.
Instead of selling the real property from your LLC to the new buyer, you can just sell the entire LLC and therefore you may be able to avoid transfer tax.

You’ll need to speak with a real estate attorney and/or accountant in your area to double check on this strategy. I strongly recommend you hire a competent real estate attorney with experience assisting clients in the sale of businesses.

You want to make sure the sales goes through correctly and your are legally avoiding transfer tax. I see a lot of amateur real estate Investors trying to sell LLC themselves and they totally screw it up!

How many LLCs for more than 10 properties?

The above strategy makes sense if you have less than 10 properties. But if you have more than 10 properties setting up 10, 15, 20, 25 different LLCs and having them all own different bank accounts could, at some point, become a little bit messy from an organizational standpoint.

So what should you consider if you own more than 10 real estate investments? A common strategy is to “group them”… putting 2-3 properties in a different LLC.

Consider LLC fees & annual registration fees for multiple LLCs

Again, for the best asset protection it’s best to put every single property in its own LLC, without those LLCs being engaged in any other businesses.

However if your state has high filing fees and high annual renewal fees then setting up 15, 20, 25 different LLCs could become quite costly on an annual basis.

See the tables below for state filing fees + annual registration fees for all states. You’ll need to weigh the cost versus the benefits to see if it’s a viable option for you.

State filing fees for LLCs

(note: it’s best to form your LLC in the state where your investment property is located. For more info, check out this video)

State LLCLLC Filing FeeLLC Annual/Biennial Fee
Alabama LLC$183$100 minimum (every year)
Alaska LLC$250$100 (every 2 years)
Arizona LLC$50$0 (report due every year)
Arkansas LLC$50$150 (every year)
California LLC$70$800 (every year) + $20 (every 2 years)
Colorado LLC$50$10 (every year)
Connecticut LLC$160$20 (every year)
Delaware LLC$90$300 (every year)
Florida LLC$125$138.75 (every year)
Georgia LLC$100$50 (every year)
Hawaii LLC$50$15 (every year)
Idaho LLC$100$0 (every year)
Illinois LLC$150 (used to be $500)$75 every year (used to be $250)
Indiana LLC$90$30 (every 2 years)
Iowa LLC$50$60 by mail or $45 online (every 2 years) [used to be $45 by mail and $30 online]
Kansas LLC$165$55 (every year)
Kentucky LLC$40 (sorry, I said $90 in the video)$15 (every year)
Louisiana LLC$100$35 (every year)
Maine LLC$175$85 (every year)
Maryland LLC$100$300 (every year)
Massachusetts LLC$500$500 (every year)
Michigan LLC$50$25 (every year)
Minnesota LLC$160$0 (report due every year)
Mississippi LLC$50$0 (report due every year)
Missouri LLC$105$0 (no report)
Montana LLC$70$20 (every year)
Nebraska LLC$105$10 (every 2 years)
Nevada LLC$425$350 (every year)
New Hampshire LLC$100$100 (every year)
New Jersey LLC$125$50 (every year)
New Mexico LLC$50$0 (no report)
New York LLC$200$9 (every 2 years)
North Carolina LLC$125$200 (every year)
North Dakota LLC$135$50 (every year)
Ohio LLC$99$0 (no report)
Oklahoma LLC$100$25 (every year)
Oregon LLC$100$100 (every year)
Pennsylvania LLC$125$70 (every 10 years)
Rhode Island LLC$150$50 (every year)
South Carolina LLC$110$0 (no report unless LLC is taxed as S-Corp)
South Dakota LLC$150$50 (every year)
Tennessee LLC$300$300 (every year)
Texas LLC$300$0 (report due every year)
Utah LLC$70$15 (every year)
Vermont LLC$125$35 (every year)
Virginia LLC$100$50 (every year)
Washington LLC$200$60 (every year)
Washington DC LLC$220$300 (every 2 years)
West Virginia LLC$100$25 (every year)
Wisconsin LLC$130$25 (every year)
Wyoming LLC$100$50 (every year)

Annual renewal fees for LLCs

State LLCLLC Filing FeeLLC Annual FeeDuePayable To & Form Name
Alabama LLC$183$100 minimum2.5 months after formationAL Department of Revenue, Initial Business Privilege Tax Return
Alaska LLC$250$100Biennial, January 2ndAK Department of CCED, Biennial Report
Arizona LLC$50$0No annual fee + no report dueN/A, N/A
Arkansas LLC$50$150Annual, May 1stAR Secretary of State, Franchise Tax Report
California LLC$70$800 + $20VariousCA Franchise Tax Board, Annual LLC Franchise Tax + Stmt. of Information
Colorado LLC$50$105 month window surrounding
anniversary month
CO Secretary of State, Periodic Report
Connecticut LLC$160$20Annual, anniversary dateCT Secretary of State, Annual Report
Delaware LLC$90$300Annual, June 1stDE Dept. of State, Annual Franchise Tax
Florida LLC$125$138.75Annual, May 1stFL Department of State, Annual Report
Georgia LLC$100$50Annual, April 1stGA Secretary of State, Annual Registration Fee
Hawaii LLC$50$15During quarter of anniversary dateHI Business Registration Division, Annual Report
Idaho LLC$100$0 (must file an information report, no fee though)Annual, anniversary monthID Secretary of State, Annual Report
Illinois LLC$150 (used to be $500)$75 (used to be $250)Annual, anniversary monthIL Secretary of State, Annual Report
Indiana LLC$90$50 (by mail) or $31 (online)Biennial, anniversary monthIN Secretary of State, Business Entity Report
Iowa LLC$50$60 by mail or $45 online (used to be $45 by mail and $30 online)Biennial, April 1st of odd yearsIA Secretary of State, Biennial Report
Kansas LLC$165$55Annual, April 15thKS Secretary of State, Annual Report
Kentucky LLC$40$15Annual, June 30thKY Secretary of State, Annual Report
Louisiana LLC$100$35Annual, anniversary monthLA Secretary of State, Annual Report
Maine LLC$175$85Annual, June 1stME Secretary of State, Annual Report
Maryland LLC$100$300Annual, April 15thMD State Dept. of Assessments, Personal Property Tax
Massachusetts LLC$500$500Annual, anniversary monthMA Secretary of the Commonwealth, Annual Report
Michigan LLC$50$25Annual, February 15thMI Dept. of LARA, Annual Report
Minnesota LLC$160$0 (must file an information report, no fee though)Annual, December 31stMN Secretary of State, Annual Report
Mississippi LLC$50$0 (must file an information report, no fee though)Annual, April 15thMS Secretary of State, Annual Report
Missouri LLC$105$0No annual fee + no report dueN/A, N/A
Montana LLC$70$20Annual, April 15thMT Secretary of State, Annual Report
Nebraska LLC$105$10Biennial, April 1st of odd yearsNE Secretary of State, Biennial Report
Nevada LLC$425$350Annually, anniversary monthNV Secretary of State, Annual List of Members + Business License
New Hampshire LLC$100$100Annual, April 1stNH Secretary of State, Annual Report
New Jersey LLC$125$50Annual, anniversary monthNJ Department of Treasury, Annual Report
New Mexico LLC$50$0No annual fee + no report dueN/A, N/A
New York LLC$200$9Biennial, anniversary monthNY Department of State, Biennial Statement
North Carolina LLC$125$200Annual, April 15thNC Secretary of State, Annual Report
North Dakota LLC$135$50Annual, November 15thND Secretary of State, Annual Report
Ohio LLC$99$0No annual fee + no report dueN/A, N/A
Oklahoma LLC$100$25Annual, anniversary monthOK Secretary of State, Annual Certificate
Oregon LLC$100$100Annual, anniversary monthOR Secretary of State, Annual Report
Pennsylvania LLC$125$70Every 10 yearsPA Department of State, Decennial Report
Rhode Island LLC$150$50Annual, September 1st - November 1stRI Secretary of State, Annual Report
South Carolina LLC$110$0No report due unless you file taxes as an S-CorpN/A, N/A
South Dakota LLC$150$50Annual, anniversary monthSD Secretary of State, Annual Report
Tennessee LLC$300$300 minimumAnnual, April 1stTN Secretary of State, Annual Report
Texas LLC$300$0Annual, May 15thTX Comptroller, Public Information Report + Franchise Tax
Utah LLC$70$15Annual, anniversary monthUT Department of Commerce, Annual Report
Vermont LLC$125$35Annual, March 15thVT Secretary of State, Annual Report
Virginia LLC$100$50Annual, anniversary monthVA Corporation Commission, Annual Registration Fee
Washington LLC$200$60Annual, anniversary monthWA Secretary of State, Annual Report
Washington DC LLC$220$300Biennial, April 1stDCRA, Biennial Report
West Virginia LLC$100$25Annual, July 1stWV Secretary of State, Annual Report
Wisconsin LLC$130$25Annual, anniversary quarterWI Secretary of State, Annual Report + Business Tax Registration
Wyoming LLC$100$50 minimumAnnual, anniversary monthWY Secretary of State, Annual Report

Consider whether or not you will be financing with the LLC

If you are obtaining financing with the LLC you need to consider two things:

1. If you’re obtaining a loan in the LLC, mortgage rates are typically higher than for personal mortgages.

The reason being is the loan is often considered a commercial loan with the bank.
I don’t know why they call it “commercial” even when the property is a zoned residential, but most banks refer to loans made to LLCs as commercial loans commercial loans.

Commercial loans are made in a different department at the bank and have different qualification requirements.

I recommend making a number of phone calls to your mortgage brokers and bankers to make sure they even issues loans to LLCs. Not every bank does, but if you make enough phone calls, you’ll find one. Trust me, they do exist. Also ask around at your local REIA… you’ll find a few good referrals this way.

2. Also consider that most banks will require you to personally guarantee the loan. This means that if your LLC defaults on the payments, the bank can go after you and your personal assets to fulfill the judgment. Short lesson here: make your damn payments on time!

Added benefit of properties owned in LLCs

In Most states, if you have more than 4 mortgages in your personal name you cannot get any more mortgages.

This is why owning your properties in LLCs is very beneficial. In theory you could have an infinite number of loans made out to all your LLCs… and you’d still be considered a first-time home buyer… meaning, you could qualify for a nice FHA, or other friendly-term financing ;-)

The reason for this is that those loans are “attached” to the LLC and they will not show up on your personal credit report (even if you personally guarantee them).

Holding real estate in specific LLCs

Another strategy that many people use is setting up different LLCs for different asset classes.

For example, if you’re wholesaling properties, you can run an entire business under one wholesaling LLC.

If you own a lot of low-income houses you can put two to three of those in one LLC.

If you own nicer, high-end income properties you can also put those under a different LLC.

Etc., etc.

Here’s the easiest way to start

Easiest way to start is to form an LLC for the first few properties that you buy and then see how the organization and management goes from there.

This way, once you purchase three or four properties you’ll know whether you want to continue and keep setting up an LLC for each property or you want to start combining them.

Or feel free to do this strategy until you have 10 properties owned in 10 different LLCs.

This is the easiest way to start as you don’t need to make a complicated decision before testing it out and experiencing it in the real world.
Cost versus benefit analysis

If you are a real estate boss and you own 50 Properties or more, you really need to consider the cost versus benefit analysis.

See the table above for all 50-state annual fees.

Also, if you have 50 properties each owned by a different LLC, you’ll have 50 different checking accounts… and you’re also be managing the paperwork for 50 different LLCs.

This could cause somewhat of a headache, especially for those who are not organized

Remember, the purpose of real estate investing is to make money enjoy your life. If you’re spending all of your time managing your organizing paperwork, sorting through crazy amounts of bills and making sure you’re writing checks from the correct account, balancing dozens of checkbooks, life won’t be very fun.

Then again, neither is getting your ass sued. So be wise. Do some serious cost vs. benefit analysis.

I’d say 10 properties or less, one LLC for each is a good setup.

11 properties or more: you’ll want to look at some more advanced real estate strategies, like Series LLCs.

Some states allow what is called Series LLCs, which can be an effective way to keep the chaos of multiple LLCs with multiple assets to a minimum if done right.  (Think franchises like Wendy’s or McDonald’s.)  These are a little more complicated, and not an option in all states, so you’ll definitely want a lawyer’s guidance on that scenario.

Hopefully at the point you need this level of complexity, you have some decent cashflow and can afford a badass real estate lawyer and/or tax advisor. They’ll help you get started on the fancy stuff… like different LPs (limited partnerships) which own groups of LLCs, or even Series LLCs if that is a better fit.

I hope this article was helpful!

Now go setup some damn LLCs and starting making those real estate monies ;)

Need help with your LLC? Have a professional LLC service file for you:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)
Matt Horwitz
Founder & Educator, LLC University®
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! LLC University® teaches people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your business journey.
Leave a Comment (24) ↓
Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.


  1. Warren McKenney March 29, 2017

    If you have a Series LLC, how do you title each piece of property when buying? i.e. XYZ, LLC, 1234 Knowhow Way, Austin, TX? Or just in the name of the LLC? Thanks,

    • Matt Horwitz March 29, 2017

      Hi Warren, we do not teach or offer information about series LLCs, but I believe you would title each piece of property in its respective LLC unit. Please double-check with an attorney though. Apologies we can’t be more specific on that one.

  2. Rodney Merrill May 9, 2017

    What if you learned about this too late? Is it possible to transfer the properties to an LLC later?

    • Matt Horwitz May 9, 2017

      Hi Rodney, yes, you can. You’ll need to contact a title company for the details. You’ll also need to contact the lender to see if they’ll allow the transfer.

  3. Dave Barrett May 15, 2017

    I have rental property in Massachusetts, but I live in Vermont. Can I set up an LLC in Vermont for the Massachusetts property?

    • Matt Horwitz May 15, 2017

      Because you are doing business in Massachusetts, you’re supposed to form the LLC there. Using a Vermont LLC for real estate located in Massachusetts may require the registration of a Foreign LLC (the Vermont LLC registered as a Foreign LLC in Massachusetts). Hope that helps.

  4. Joseph C. August 25, 2017

    If I set up an LLC to purchase a property, can I still pay for the property out of my own personal bank account? Or do I have to set up a a separate bank account for the LLC to use to make the purchase?

    • Matt Horwitz August 28, 2017

      You’re supposed to make a capital contribution (deposit) into the LLC’s bank account, then take proceeds out of there for settlement.

  5. Sharon Terry February 11, 2018

    Currently have 3 rental properties under our West Virginia registered LLC. Looking to purchase another rental unit in North Carolina. Can we purchase that property using our West Virginia LLC company name?

    • Matt Horwitz February 12, 2018

      Hi Sharon, you can, meaning the title company will likely allow it, however, it’s not technically legal. If the West Virginia LLC holds a rental property in North Carolina, then it’s illegally transacting business in the state and you’d need to register the West Virginia LLC as a Foreign LLC in North Carolina. So you could either take care of the Foreign LLC registration before closing, or another option is to form a North Carolina LLC and then have the NC LLC take title to the property in NC. Hope that helps.

  6. Ameya B March 1, 2018

    Along with a separate EIN and separate bank account, should I also get a separate credit card for each LLC? This is to correctly allocate credit card expenses to the correct LLC.

    Ideally, I wouldn’t want to apply for a new credit card for each LLC, what I would want is for my credit card vendor to issue me a new and different credit card number for the new LLC, all tied to the same single credit card account. This way I get multiple statements for all my credit card numbers and I can allocate all expenses on one statement to a specific LLC, rather than having to go through one statement and individually allocate them to the correct LLC.

    Are there any vendors that offer the service of multiple credit card numbers for the same account. (Note I’m not talking about virtual credit card numbers)


    • Matt Horwitz March 2, 2018

      Hey Ameya, I’m quite familiar with business credit cards, and I’ve never heard of anything like this. You could of course call a few credit card companies to check, but as far as I’m aware, they won’t let you “merge” accounts like that. Hope that helps.

  7. margot valdes March 11, 2018

    My Husband and I just bought a dental office in Texas. The owner is financing the practice and the building as one unit. It is a small practice in a small town. We are going to pay ourselves rent. I thought it would be a good idea to have an LLC but after reading about it on the internet I think I’m making it more complicated than it is and potentially spending a lot of time and money on this..My husband has malpractice insurance and we have liability insurance..Any suggestions??

    • Matt Horwitz March 19, 2018

      Hi Margot, since you said “just bought” a dental office, I’m assuming you’ve already closed on the transaction? And if so, then you’ve already taken title until yours and your husband’s name, correct? Malpractice insurance is for malpractice. There are a number of other liability issues with running a business so people form an LLC to separate their business assets from their personal assets. We have more info on protecting your assets here: LLCs and asset protection. There may also be additional insurance coverages you and your husband may want to consider. Also, if you form an LLC, you’ll need to transfer the assets from your names to the LLC. If you purchased property, you’ll need to re-title the property and go through another closing. Hope that helps.

  8. Roy April 7, 2018

    Great article! I hope you can answer a few tough questions for me…
    1. For each LLC property, is it cost effective to file a tax return for each one and also hold a business checking account for each? (For 10 properties or less)
    2. With 10 different bank accounts how do you “pay” yourself? Just transfer portions from all 10 to your main buisiness account?
    3. With buisinness operating expenses like property management (1 company for all 10), travel, vehicle, phone, internet… how are those collective expenses passed on to each individual LLC? Divide by 10?
    4. If my main LLC owns 10 differnt LLCs, is the main LLC subject to lawsuits if 1 of the property LLCs get suied?

    I know its a handful, hope you can help
    Thanks in advance

    • Matt Horwitz April 8, 2018

      Hey Roy, thanks!
      1. If the LLC has activity, then depending on how the LLC is taxed, it’ll have a Schedule in your personal tax return in addition to any applicable Forms. If you have separate LLCs, then you’ll want them to have separate bank accounts. If not, then that opens you up to the risk of the corporate veil being pierced.
      2. Best to chat with an accountant on this. There’s not a black and white answer.
      3. See #2.
      4. Not if the entities are set up and run properly.
      Apologies we couldn’t get into depth on your tax questions. You really need someone to look at this more deeply with you. Thanks for your understanding.

  9. Daniel Hernaiz May 9, 2018

    Hello, I set up the LLC to purchase a two family dwelling for rental and the seller states I set up the LLC incorrect, this was a foreclosure property and I am buying it from that entity. Is there such a thing as a innapropriate LLC?

    • Matt Horwitz May 16, 2018

      Hi Daniel, this is a challenging question to answer as “inappropriate” could mean a number of things. Also, not sure why the seller has any say in how you form your LLC. Might want to run this question by the title company as well as a real estate attorney. Hope that helps.

  10. Joseph Frye June 18, 2018

    We are residents of Wisconsin, about to buy a vacation property in Florida, in which state should we set up the LLC?

    • Matt Horwitz June 19, 2018

      Hi Joseph, you ultimately need an LLC registered in Florida that owns the real estate since that is where you’re legally doing business. There’s a few ways to go about it. The simplest examples would be to form a Domestic LLC in Florida or to form a Domestic LLC in Wisconsin and register it as a Foreign LLC in Florida. Hope that helps.

  11. Dave December 16, 2018

    Hi, I have 2 rental properties that were purchased through traditional mortgage and then transferred to a single LLC.
    Even though they are both under the same LLC, can I set up multiple dba’s so that I can open separate bank accounts for each property to help keep the accounting separate?

    • Matt Horwitz December 18, 2018

      Hi Dave, great question. Yes, you can. An LLC can multiple DBAs. And yes, that would make your banking and accounting life easier ;)

  12. Lisa Hensley February 6, 2019

    My family has an LLC that has several bank accounts titled under it as well as a few CD’s. We are going to invest in a rental property. Do we need to open another LLC or is it ok to title our first real estate investment under this LLC even though it already has the bank account and CD investments? Thanks!

    • Matt Horwitz February 12, 2019

      Hi Lisa, there is no rule that an LLC must only have one asset titled in it. It’s up to you. However, it may be worth considering, or having a conversation with an attorney, about the pros and cons of using the existing LLC vs a new LLC. If there is an issue at your rental property and the LLC is sued, that could jeopardize the existing assets. Hope that helps.


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