Forming Corporations

B-Lo,

You also have to ask yourself where is the liability likely to come from. In some situations, the two people in the marriage have very different liability profiles. If one is a plastic surgeon and the other is a stay at home parent, the parent could be the better individual to how the family home. THe surgeon will be pone to lawsuits so is more likely to have to pay out from their personal assets.

If you own a rental property and you manage it yourself, that will create more liability that if you use a property manager. I am not saying it makes sense to use a property manager. Just that the presence of one can shift some of the liability because the owner might not be making some of the decisions (how an applicant is screen triggering a discrimination claim).

There are risks in the world. We are safer on a plane than driving yet most all of us jump into a car and figure we will be just fine. You can create firewalls so problems in one area of your life do not automatically trigger problems in another area. The risk of divorce is pretty high yet many get married for life. Divorce is one of the biggest financial set backs people can face and most couples do nothing to anticipate the risk.

Operate the property legally. Join a landlord association that keeps you current with your state regulations. Hire out the work or do it yourself but make sure it gets done correct. Screen the tenant well so you eliminate ones that are high risk. Stick to the laws on screening. Buy extra liability insurance so the bulk of any possible claims are handled by the insurance. Make sure you have a good insurance broker so they help you select the right policy. Declare everything that the insurance company asks about so they will not walk away later because you incorrectly declared the risks.

Thank you for you advice, John. We have hired a property management company and definitely want to do this right. I’ve bought a couple of books on real estate investing but they aren’t as helpful as this forum. What a generous and helpful group of people here! :biggrin

If you have other questions, let me know and/or post them. THere are definitely people on the site who enjoy sharing and many have very deep experience.