Are there downsides to holding Real Estate in an LLC?

This is not an area with which I have any experience or exposure, but I really thought I remembered, from CPE classes of days long past, and sources which I can no longer recall, or locate, that the recurring advice was, "Don't put Real Estate into an LLC!".  

But now I find myself in a situation where someone is asking my advice on the subject and, the little voice in the back of my head keeps saying, "Don't put Real Estate into an LLC!", but I don't know why not, and every resource that's come up when I've attempted to research the topic, seems to scream, "DO IT!!!"  

So, I'm looking for a little wisdom of the collective.  Is there a downside to holding Real Estate in an LLC?    

Or even better, Short of telling me it's because I'm losing my mind, Does anyone have any thoughts about what it is that's trapped back there in my grey matter, possibly slightly scrambled, that's making me think I remember, "Don't put Real Estate into an LLC!"?  Am I confusing LLCs with something else?   Or is it possible that that used to be the rule, based on circumstances at the time, and now things are different, and LLCs are a good vehicle?

3 additional answers

No answers have been posted

More Actions

People come to Accountants Community for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach: