Traditional limited liability companies, or LLCs, have long been an effective way for property investors to protect their real estate assets. In 1996, investors began using a new type of LLC called a series LLC. This type of LLC separates assets into different sub-LLCs or series, so it can be an excellent option for investors seeking extra protection for a large multi-property portfolio. But is it the right structure for you? We compare LLCs and series LLCs to help you choose the right option for protecting your real estate empire. Key Takeaways Series LLCs may protect your properties be ..read more

Liability insurance can provide vital protection against personal injury or property damage claims from tenants or visitors to your properties. However, it takes much more than liability insurance to effectively protect your real estate empire. To ensure your portfolio is secure, there are other excellent options to consider. Key Takeaways Different types of insurance, such as property, flood, and loss of rent, can offer protection beyond liability. Establishing a limited liability company can help protect your personal assets from claims against the business. Tenants by the entireties i ..read more

Investing in real estate is one of the most popular ways to build equity and establish a steady income. However, when you own multiple properties, especially for rental purposes, you also take on more financial risk. To protect your real estate assets and keep your finances in great shape, there are a few steps to take, like establishing a trust or purchasing specialized insurance. Here are five of the top asset protection steps for multi-property owners, along with checklists for each method that you can use to guide your decisions, purchases, and applications. Key Takeaways Landlord in ..read more

Approximately two-thirds of Americans with homeowner insurance policies are underinsured, according to the Insurance Information Institute. The average policyholder is underinsured by around 20 percent, but some are underinsured by as much as 60 percent. As premiums rise, the Wall Street Journal notes that around 12 percent of American homeowners have no home insurance at all. Failing to have adequate insurance coverage could compromise your ability to maintain your investment properties if the worst happens. While insurance alone isn’t enough to protect your assets, these are some of the ..read more

I’m about to share with you a crucial lesson I learned the hard way. In the world of finance and asset protection, I thought I had all my bases covered, but I was in for a rude awakening. My personal bank account got garnished, and trust me, it’s a situation you want to avoid at all costs. In this blog, I’m going to walk you through the steps to protect your personal bank account using a strategy I wish I had known earlier: a specific type of trust. This isn’t just theory; it’s a real-life lesson learned from a misstep that cost me dearly.I want to make sure you’re safeguarded against the ..read more

A 1031 exchange is a real estate investment strategy where you defer paying capital gains tax on a property you sell by putting the proceeds toward a like-kind property. If that seems a little esoteric, don’t worry. Here, we explain everything you need to know about 1031 exchanges, including what we mean by “like-kind” and the process of making an exchange. Key Takeaways According to the IRS, properties are of like-kind when they’re of the “same nature and character.” Like-kindness has nothing to do with grade or quality, so most real properties are like-kind to one another. The Tax Cuts ..read more

When you sell an asset for more than you originally paid for it, your profit is called a capital gain. Capital gains are taxable at a rate based on how long you hold the sold asset. If you’re looking to realign or balance your real estate portfolio, you can effectively swap properties and defer paying capital gains tax through a 1031 exchange, where you reinvest the proceeds from a property sale in another like-kind property.  When part of an estate-planning strategy, a 1031 exchange can be a tax-smart method of bequeathing assets, as heirs typically receive a step-up in basis to the ..read more

The federal estate tax is a tax on a person’s assets upon their death. It doesn’t apply to all estates, only to those with assets valued above a specific threshold, called an exemption limit. The Tax Cuts and Jobs Act of 2017 increased the exemption limit from $5.49 million to $11.18 million for individuals and double for married couples. As the limit is indexed to inflation, it increased to $12.92 million in 2023 and will be $13.61 million in 2024. Anything above the limit gets taxed on a graduated scale that currently starts at 18% and tops off at 40%. In addition to the federal tax, so ..read more

Many real estate investors combine 1031 exchanges with other estate planning tools to reduce taxes, but there are several other reasons you might consider exploring these options. Establishing a trust or limited liability corporation with a 1031 exchange can offer additional asset protection, centralized management, and potential valuation discounts for estate tax purposes.  Key Takeaways 1031 exchanges allow real estate investors to trade one property for another while deferring capital gains taxes. Combining a 1031 exchange with an LLC or trust can provide additional benefits, inc ..read more

Planning for retirement is vital to ensuring your financial health in the future. But with the many tax-free and tax-deferred options out there, it can be challenging to know which investments are right for you. This guide covers what you need to know about tax-free versus tax-deferred tax planning so you can make the best decision for your financial future. Key takeaways: Tax-deferred investment accounts allow you to make deductions on income taxes as you invest in a retirement account, such as a 401(k), an individual retirement account, or a pension. Tax-free accounts enable you to avo ..read more