Using LLCs for Houston commercial real estate can protect you and your assets. As a result, setting up an LLC (Limited Liability Company) for commercial real estate investment is a solid business strategy. Below are some ways that LLCs can protect you.
LLC Benefits for Real Estate Investment
Using LLCs for Houston commercial real estate has several benefits. Some of these benefits are listed below:
- Limited Personal Liability – Commercial real estate deals often involve lots of money. In a lawsuit or judgment, an LLC limits the owner’s personal liability. Although the LLC’s assets may be at stake, personal finances and assets are not.
- Tax Benefits – Using LLCs for Houston commercial real estate prevents double taxation. Rental income and asset appreciation transcend to the owner. Due to this, LLC owners only pay individual taxes. As a result, LLCs lower the tax burden and offer more tax deductions.
- Management – Owners or third parties can directly manage LLCs. This makes delegation and management easier.
- Startup Fees – LLCs often pay fewer startup fees than corporations. And unlike corporations, LLCs are more flexible when distributing profits.
- Transfer of Ownership – LLCs makes transferring ownership easier. Consequently, properties can be gifted, letting owners avoid certain taxes.
What is a Series LLC?
A Texas Series LLC establishes one or more sub-series within an LLC. Each has separate rights, obligations, purposes, and liabilities. Therefore each can enter into contracts, borrow money, hold assets, have different structures, and sue or be sued.
Using Series LLCs for Texas commercial real estate has several advantages. Judgments can only be brought against the sub-series. Therefore, the rest of the LLC is not liable for the sub-series’ assets or debts. In addition, if someone breaks their leg on your property, they might sue. However, the Series LLC acts as a buffer, insulating the rest of the LLC from liability.
Contact CXRE Today
To learn more about using LLCs or Series LLCs for commercial real estate investment in Houston and throughout Texas contact CXRE today.
Learn more about Texas Series LLCs at the Texas Secretary of State website. For questions about forming an LLC or questions regarding legal or tax advantages, consult your tax advisor or attorney.