Should I transfer my rental property into an LLC?

  • Landlords should transfer their rental property into an LLC if they can
  • The deciding factor is whether or not the property is subject to a mortgage
  • If the property is not subject to a mortgage, then definitely transfer it to an LLC to avoid liability from renters
  • If the property is subject to a mortgage, the mortgage lender must give permission to transfer it to an LLC
  • Often their answer is no. In some cases they will agree, but may raise your interest rate
  • If you still want to transfer your property under mortgage to an LLC, you need to consider the economic ramifications of an increased interest rate.
  • In any case, discuss this matter with an experienced New Jersey business attorney.