Is It Too Late to Put Your Michigan Investment Property Into an LLC?
Owning rental property in Michigan can be a great investment—but how you hold title matters more than you think.
If you’re currently holding investment property in your personal name, you could be exposing yourself to unnecessary risk. In this article, Atty. Hadi Harp of Harp Law shares insight on the best legal structure for protecting your real estate portfolio.
Why Use an LLC for Your Rental Property?
A Limited Liability Company (LLC) helps shield your personal assets from lawsuits or liabilities related to the rental property. If your tenant gets injured or your property is involved in a legal dispute, an LLC can limit liability to just the property owned by that company—not your personal bank account or other assets.
Key Considerations Before Transferring
If you've already acquired the property in your own name, you may still be able to transfer it into an LLC. However, there are a few things to keep in mind:
Mortgage Clauses: Check for "due-on-sale" clauses that may be triggered by the transfer. Always consult your lender first.
Property Tax Uncapping: Transferring ownership could lead to reassessment of property taxes.
Title Insurance: A post-purchase transfer might impact coverage unless done correctly.
Ideal Scenario? Buy in the Name of the LLC
The cleanest solution is to set up the LLC before purchasing the property. Doing so ensures:
The purchase agreement and deed go directly to the LLC
Title insurance is issued correctly
Tax responsibilities align with the LLC
There’s no need to backtrack or seek lender permission
Already under contract? You can assign the purchase agreement to your LLC before closing.
What If It’s Already in Your Name?
It’s not too late—but act smart. If you already own the property in your name, transferring to an LLC is still highly recommended. Just be sure to:
Notify your lender
Discuss tax implications with a tax professional
Review title insurance policies
Handle the deed transfer correctly
Most importantly, don’t wait until it's too late. A personal ownership structure could leave all your assets vulnerable in a worst-case scenario.
Protect Your Investment—The Right Way
Transferring property into an LLC can give you peace of mind and safeguard your financial future. Whether you're a first-time investor or growing your rental portfolio, structuring your real estate correctly is key.
Need help with the LLC process or legal guidance tailored to your investment goals?
📞 Contact Harp Law today to schedule your consultation with Atty. Hadi Harp.
Whether you're launching a new venture or evolving an existing one, make sure your business stays legally aligned. Connect with Harp Law today for trusted guidance on your entrepreneurial journey.