The pros and cons of forming a business for your investments

On Behalf of | Jan 16, 2019 | Real Estate LLC Formation |

If you have invested in real estate in the state of Florida in the past, you will likely have a good understanding of the hard work and element of risk that is involved in the activity. Many property developers fall into the real estate industry by following their passion and only further down the line do they decide to formalize it in a business structure.

Property developers have many reasons for creating companies to house their property investments, and it is common for them to choose to start limited liability companies (LLCs) in doing so. Many use a new LLC for every deal that they make. If you are considering starting LLCs for your property developments, it is important that you understand the pros and cons before making the commitment.

The pros of forming an LLC for individual investments

The most obvious advantage of creating an LLC is the asset protection that comes with it. Every investment presents its own risks, and many investors want these risks to be isolated.

The cons of forming an LLC for individual investments

While this asset protection in LLCs may be appealing, the costs that come with the process of starting individual LLCs can be high. In addition, it can be possible for property investors to obtain comprehensive insurance policies that offer the same amount of asset protection for a lower price.

If you still have questions about whether LLCs could be right for your property investment deals, speak with an experienced attorney. They can provide the guidance you need to ensure your assets are safe.