Managing Member (CEO) of Landwin, LLC

Anything worth doing involves risks. Becoming a successful health practitioner or lawyer, or owning a business are a few of the worthwhile endeavors that often involve risk and liability. When it comes to property investment, the stakes can be high, and there is certainly plenty of risk involved. Without the proper knowledge and skill, many investors can end up losing funds significantly. However, there are several ways you can reduce your level of risk and potential liability.

First, it’s essential know the level of risk involved in any one particular opportunity, and then to devise a protection strategy that will best suit the nature of the investment. If you’re interested in the real estate market but would like to know more about how to protect yourself, there are a few options to consider. In this article, we will briefly discuss the concept of real estate liability, why it’s important to protect yourself, and a few options for doing so.

What Is Considered Liability in Real Estate?

When thinking about participating in real estate investment, many individuals tend to overlook the substantial risks that can be involved, leaving them at a serious disadvantage in the long run. Liability in real estate can take many different forms. A few common errors in real estate investment that lead to legal responsibility and personal strain are: non-compliance with regulations and laws; failure to maintain and upkeep a property with tenants involved; and putting the title of a property in the investor’s own, personal name. Not only does avoiding liability require a thorough understanding of the real estate and housing market, but it also necessitates a foundational knowledge of legal and ethical concerns surrounding real estate investment and management.

Ways to Protect Yourself in Real Estate Investing

As we mentioned before, real estate investment is often a worthwhile venture. With the right fundamental knowledge and skill, it can lead to prosperity, security, and financial stability. However, in order to achieve success in real estate, it is crucial to take measures that significantly reduce or eliminate the risk of personal liability. Here are just a few ways to protect yourself in real estate investment:

Invest Through an LLC

LLC literally stands for “limited liability company.” Similar to a corporation, an LLC represents investors, or “members,” in a real estate investment opportunity without pointing to personal responsibility when it comes to legal and financial issues. This means that bank accounts, tax ID numbers, and business operations can all be established under the title of this individual entity. Avoiding personal liability in real estate can be significantly helped by utilizing an LLC. With a well-planned LLC asset protection strategy, your individual liability is substantially limited.

Utilize Property Management Services

The more personal connection you have to a property, or to multiple properties, the more liability you tend to accumulate. Property management is a huge part of real estate investing, and it’s not usually a good idea to manage a property on your own—this raises a lot of risk when it comes to legal concerns. Fair housing, state landlord/tenant, discrimination, and fair credit reporting laws are only a few of the laws that can present issues for property managers. To further protect yourself and your investment, it’s best to hire out professional property management services to avoid lawsuits and financial black holes.

Covering Your Bases with Insurance

Property Insurance Investment properties are much more lucrative and promising when the level of risk is limited significantly. Another way to limit your risk is to adopt a few types of insurance for different potential issues: dwelling, vacancy, construction, and personal liability policies are usually recommended. Furthermore, managing a property on your own will require additional insurance policies that protect you personally as the landlord.

Landwin’s Philosophy on Investor Protection

The investment experts here at Landwin provide a comprehensive model for protecting our investors and clients, keeping them shielded from the often unforeseen risks involved in real estate. Though our offices reside in Encino and Century City, CA, we extend our services and properties all over the nation. Offering LLC and LP options as well as SMAs, we have numerous scaffolding efforts in place to avoid personal liability on behalf of our investors. Furthermore, we take care of property management services for our clients—we oversee every project ourselves from start to finish, covering all the bases from property maintenance to managing legal affairs. To learn more about Landwin and how you may benefit from our investment opportunities, please call us today.

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