Should you buy property in company name?
Q: I’m looking at rental properties to buy in my area. I’ve heard people say that you should never buy a property in your own name. Is it better to buy an investment property in your name or in a company name?
-Scott, Atlanta, GA
A: That’s a great question, Scott. When you buy an asset like real estate in a separate legal entity rather than in your own name, it does provide you with extra liability protection. However, buying a property in a company name does often limit the kind of financing you can get. Sometimes, for example, if you purchase a property in a short sale transaction, the bank won’t allow you to buy in a company name. So the best course of action is often going to depend on your situation. If you are paying cash and plan to keep the property for some time, I would suggest you buy in a separate legal entity. If you need bank financing to buy the property, you may be required to buy in your own name. It’s also a good idea to consult an experienced CPA and real estate attorney before you make a final decision. Thanks for your question, Scott. Good luck. For more real estate tips and information, visit performanceproperty.com. I’m Gerald Lucas and I’ll see you again soon.