I have a few questions for those who know the laws of CA and AZ. I have a rental property in CA and a rental property in AZ. Currently, I am in the process of figuring out how to lower my real estate liability exposure. The answer that I found is to form a LLC.

I figured that having two separate LLCs would be ideal, one for each state. After doing some research I found out that CA charges an $800 per year LLC administration fee. My first question is, does the state of Arizona charge similar annual fee? Second, am I better off setting up a AZ or NV LLC for my CA property or should I pay the $800 per year fee.

If I had more than one property I would prefer to set up CA LLC, but at this stage it doesn’t seem very economical to do so.

Thanks in advance for your responses.

AZ is much cheaper & easier to deal with than CA. Then again, so are all of the other 49 states!

Some people suggest that a NV LLC can be used in CA without paying CA fees & taxes. I strongly disagree, because I think having rentals in CA qualifies as “doing business” there, which in turn requires registering with CA & paying their fees & answering their questions. As such, I would get one LLC in each state you are doing business in to start with. I might consider waiting to get an LLC in CA until you have more to protect there. $800+ is awfully expensive for “tail insurance” on one property.

John Hyre