Should You Create a Separate Legal Entity for Your Rentals?

Updated 21 days ago (March 6, 2026)

Forming a limited liability company (LLC) has several benefits to medium and large landlords, but limited value for small landlords.

An LLC is a legal entity, and as such it comes with administrative complexities. On the other hand, an LLC also has the advantage of limiting your personal liability when things go sour. Therefore, the answer depends on your situation.

Tellus TIP:

You should only set up an LLC if you can benefit from doing so. Therefore, you should make sure that your LLC is well managed, so that you can actually be shielded from unlimited personal liability.

Legal Disclaimer: Tellus provides this content for informational purposes only. This is not legal advice. Laws vary by state and locality, and regulations may have changed since this article was published. Consult a qualified attorney for guidance specific to your situation.

State-by-State Guide

Laws on this topic vary significantly by state. Select a state below to read about its specific laws and statutes.

StateState-Specific Guide
California California Security Deposit Laws for Landlords, California Rent Increase Rules for Landlords, California Landlord Maintenance and Repair Obligations, California Lease Agreements for Landlords, California Eviction Process for Landlords, California Landlord Entry Rules and Tenant Privacy
New York New York Security Deposit Laws for Landlords, New York Rent Increase Rules for Landlords, New York Landlord Maintenance and Repair Obligations, New York Lease Agreements for Landlords, New York Eviction Process for Landlords, New York Landlord Entry Rules and Tenant Privacy
Texas Texas Security Deposit Laws for Landlords, Texas Landlord Maintenance and Repair Obligations, Texas Lease Agreements for Landlords, Texas Eviction Process for Landlords, Texas Landlord Entry Rules and Tenant Privacy
Florida Florida Security Deposit Laws for Landlords, Florida Landlord Maintenance and Repair Obligations, Florida Lease Agreements for Landlords, Florida Eviction Process for Landlords, Florida Landlord Entry Rules and Tenant Privacy
New Jersey New Jersey Security Deposit Laws for Landlords, New Jersey Rent Increase Rules for Landlords, New Jersey Landlord Maintenance and Repair Obligations, New Jersey Eviction Process for Landlords, New Jersey Landlord Entry Rules and Tenant Privacy
Illinois Illinois Security Deposit Laws for Landlords, Illinois Rent Increase Rules for Landlords, Illinois Landlord Maintenance and Repair Obligations, Illinois Eviction Process for Landlords, Illinois Landlord Entry Rules and Tenant Privacy
Massachusetts Massachusetts Security Deposit Laws for Landlords, Massachusetts Landlord Maintenance and Repair Obligations, Massachusetts Lease Agreements for Landlords, Massachusetts Eviction Process for Landlords, Massachusetts Landlord Entry Rules and Tenant Privacy
Pennsylvania Pennsylvania Security Deposit Laws for Landlords, Pennsylvania Landlord Maintenance and Repair Obligations, Pennsylvania Lease Agreements for Landlords, Pennsylvania Eviction Process for Landlords, Pennsylvania Landlord Entry Rules and Tenant Privacy
Washington Washington Security Deposit Laws for Landlords, Washington Rent Increase Rules for Landlords, Washington Landlord Maintenance and Repair Obligations, Washington Eviction Process for Landlords, Washington Landlord Entry Rules and Tenant Privacy
Maryland Maryland Security Deposit Laws for Landlords, Maryland Rent Increase Rules for Landlords, Maryland Landlord Maintenance and Repair Obligations, Maryland Eviction Process for Landlords, Maryland Landlord Entry Rules and Tenant Privacy
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