Creating a Rental Property LLC in Nevada

Dealing your Nevada rental property into an LLC plays a winning hand of legal security and tax advantages, betting on your investment’s success in the Silver State’s dynamic real estate casino.

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Whether it’s a vacation rental, residential home, or apartment building, you might not think of yourself as a business when you’re considering renting a property out to someone else. But the truth is things go can wrong, just like any business. It’s a good idea to take advantage of legal protections for yourself, like forming a limited liability company (LLC).

Setting up an LLC is advantageous for many reasons. Not only are they easy to create, but the liability protection, tax benefits, and flexibility in management style make them a great option for real estate investors. We can form an LLC in Nevada for you today, and after formation, our other products and services can help make running your rental property business as smooth as possible.

Benefits of creating LLCs for rental properties in Nevada

Although most people associate Las Vegas with unrestrained partying, accidents can happen anywhere. Creating an LLC offers any property owner a layer of liability protection you can’t get with insurance. If someone gets injured on your property or you owe debts to a contractor, they must sue the LLC before they can reach your personal assets. As a business owner, to prevent someone from suing for your personal assets, you must keep the business assets separate from your personal expenses. You can lose the protection of the LLC if you co-mingle the rental income with your personal assets.

Separating the business and personal accounts helps at tax time, too. LLCs use “pass-through” taxation, meaning you’ll report the business’s profits and losses on your personal tax return. This means that you’ll pay the individual rate rather than the corporate rate. And if you’ve kept separate records, it’ll be easy to deduct the business expenses from the taxes you owe.

Nevada is one of a few states to offer a special business structure called a series LLC. The series LLC is popular for real estate investing because the law treats each “series” as a separate business, without maintaining additional registrations. If each series owns a different property, that keeps each property separate from the obligations of the others. To create a series LLC, you’ll need to have your Operating Agreement specify the series and the members who will operate the series. We can help you get started with our Operating Agreement template for LLCs.

What to know before creating a rental property LLC in Nevada

LLCs are popular with real estate investors because they allow you to separate your personal assets from your rental properties. The LLC is a relatively new business structure, blending the best parts of corporations and partnerships. An LLC has the legal protection of a corporation and the flexibility of a partnership. When you start an LLC for your rental property in Nevada, you’ll access benefits only available to business owners.

How to form an LLC for your Nevada rental property

It’s easy to start an LLC in Nevada. Our team of business experts can help you complete these five simple steps that’ll make sure you’ve started your business the right way:

Step 1: Choose an LLC Name

When selecting a name for your LLC, be sure to choose one that meets state requirements. We can do a search for you to see if the business name you want is available. If it is, let us reserve the name while you get the filing paperwork together. 

Step 2: Appoint a Registered Agent in Nevada

Businesses in the state are required to appoint a registered agent. This person is responsible for receiving important documents on behalf of the LLC, such as state correspondence and legal notices. If you need a registered agent, we can help you find one.  

Step 3: File Nevada Articles of Organization

To officially form your rental property LLC, you need to file Articles of Organization with the right state office and include the appropriate filing fee.

Step 4: Draft a Nevada Operating Agreement

Your LLC’s Operating Agreement is one of your most important business documents. It governs how your LLC runs and provides instructions for anything from voting procedures to dissolve the company. If you’re not sure how to create an Operating Agreement, we offer templates that can serve as a guide. 

Step 5: Apply for an EIN

The IRS assigns businesses a nine-digit EIN that is used to identify their enterprise. Having one is necessary for certain business matters, such as opening a business bank account, hiring employees, and getting financing. You can apply for an EIN yourself on the IRS’s website, or we can do it for you with our EIN service.

Next Steps

Once you’ve formed your Nevada real estate LLC, you’re ready to start buying property. If you need to transfer your property to the LLC, start by writing a deed of transfer. Then, you’ll record the deed in the office of the property’s county clerk. You may also be responsible for paying a Real Property Transfer Tax. However, Nevada offers a tax exemption if you transfer property to a business that you 100% own.

Next, if you’re transferring property that you have an active mortgage on, you’ll need to inform your lender. They’ll adjust the paperwork to reflect the LLC’s ownership. In addition, because the business is now responsible for the property, the lender may want to rework the terms of the loan. This might include an increased interest rate.

If you formed your LLC before renting your property, make sure your lease agreement shows the LLC as the owner. If you’ve already started renting, you’ll need to inform your current tenants that the LLC now manages the property. You’ll also want to edit your rental agreements to show the LLC as a party to the contract.

Who should form a Nevada LLC for their rental property?

Anyone planning to start or continue renting property can benefit from creating an LLC, whether the property is residential or commercial. It’s easier to form your LLC before buying any property, as this allows you to put the title under the LLC’s ownership from the start. If the LLC buys the property, the deed will be in the LLC’s name. However, if you’ve already started renting, it only takes a few extra steps to transfer the property to your LLC once you’ve got it up and running.

How We Can Help

Although you may not have thought of a property manager as a business owner, an LLC can help protect your investment properties. As a business owner, you’ll have access to benefits such as liability protection and business deductions. When you’re ready to start your rental property LLC in Nevada, let our experts help. When you use our Worry-Free Compliance Service, we’ll keep your financial documents all in one place while reminding you of important deadlines. Try our business plan template, and we’ll help you identify the goals you’re working toward. No matter the services you sign up for, when you rely on ZenBusiness, we’ll be here to answer your questions from start to finish.

Nevada LLC for Rental Property FAQs

  • When you create an LLC for your rental property, you’ll get liability protection, separation of your business and personal assets, and business tax deductions.

  • When naming your LLC, you should pick a name that is unique from any other Nevada company. Your name must contain the words “Limited-Liability Company,” “Limited Liability Company,” “Limited Company,” or “Limited.” You can also use the abbreviations “Ltd.,” “L.L.C.,” “L.C.,” “LLC.,” or “LC.”

  • You should register your LLC in the state where you’ll be “doing business.” The state will consider your LLC to be “doing business” where your property generates rental income. Therefore, if your rental property is located in Nevada, you won’t need to register in your home state. But it’s always best to check with local authorities to ensure you are in compliance.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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