real estate
How you choose to protect your real estate assets depends on a number of factors, including your perceived risk tolerance, how extensive your real estate holdings are, and how much you have to lose.
Owning rental properties is an excellent tool for building wealth, passive income, and ultimately achieving financial freedom (if that’s your goal).
Enter the world of asset protection. In real estate ownership terms, asset protection is a vital way to make sure you won’t lose your property, capital, or even personal savings in the event of a lawsuit.
Insurance is by far the most common way to protect your assets, and it works pretty well. This doesn’t change someone’s ability to sue you, but it does cover you in that event.
Anonymity is another great level of protection. Many investors will place their properties into entities that do not list your personal name publicly. That way if there’s an issue, it makes it difficult for people to easily identify who owns the property.
The least expensive of all methods on this list, debt provides quite a bit of asset protection built-in. After all, if you don’t have a lot of equity, there isn’t much for a potential lawsuit to take away.
If this sounds like a good option for you, make sure to consult with a legal professional. That way, you’ll make sure to avoid any potentially costly errors and get set up in the best way possible.
LLC
Mitigating risk is a huge factor in successful real estate investing, and it applies to every aspect of the purchasing process–even when you already own a property. Plus, taking the right steps ahead of time can save you from a world of headaches down the road.