Got Rental Property?
Many new landlords often overlook how to properly structure ownership of the investment property, you may need to form a Limited Liability Company. Also, having a sound lease is essential to your ongoing protection.
Owning a rental is a business. The right entity structure, a well-drafted lease, and clean operational practices can protect your assets, reduce disputes, and keep cash flow predictable. Below is a practical playbook you can apply whether you manage one home or a growing portfolio.
Whether you’re a first-time landlord or a seasoned investor, managing rental property requires more than collecting rent each month. You must adopt a strategic approach to protect your assets, minimize disputes, and keep your business running smoothly. The following five steps outline practical legal and operational measures every property owner should take to safeguard investments and set the stage for long-term success.
Holding rental property in your individual name exposes your personal assets in the event of a lawsuit. Forming a Limited Liability Company (LLC) separates rental risks from your personal finances. If you own multiple rentals, consider one LLC per property to silo liability and safeguard the rest of your portfolio. Keep separate bank accounts to make bookkeeping and tax prep cleaner.
Related Post: Should I form an LLC in Missouri
Templates miss nuances that matter. Your lease agreement should match your property type (residential vs. commercial), your business model, and Missouri practice. Our real estate team routinely drafts and reviews leases, and addresses property-specific issues before they become disputes.
Parties & Premises – Correct legal names, property description, and any included storage/parking.
Term & Rent – Lease length, due dates, late fees/notice, proration, and rent-increase mechanics.
Deposits & Fees – Security deposit amount, permissible uses, timeline and method for accounting/return.
Maintenance & Repairs – Who handles what, access for inspections/repairs, response windows.
Utilities & Services – Which party pays for what (gas, electric, water, internet, trash).
Use & Occupancy – Guest limits, subletting/assignment, short-term rental prohibitions.
Rules & Addenda – Pets, smoking, HOA/condo rules, lead-based paint or other required disclosures.
Default & Remedies – Cure periods, notices, and lawful grounds for termination/eviction.
Build-Out & Delivery Condition – Who pays for improvements; delivery “as-is” or turnkey.
Rent Structure – Gross, net (NNN), or percentage rent; CAM reconciliations; audit rights.
Use Clause & Exclusivity – Define permissible operations; consider exclusivity or co-tenancy.
Assignment/Subletting – Landlord consent standards and financial due-diligence rights.
Insurance & Indemnity – Required coverages, waivers of subrogation, casualty/condemnation treatment.
Why custom drafting matters: We often resolve property issues with carefully drafted documents such as deeds, easements, and well/driveway agreements to avoid litigation. The same prevention mindset applies to leases.
FSBOs, seller financing, contracts for deed, and lease-purchase agreements can be useful when interest rates or lending hurdles make traditional financing difficult. These arrangements are flexible but complex—paper them correctly so they’re enforceable and aligned with your goals.
Written Applications & Screening – Document criteria; apply them consistently.
Move-In/Move-Out Checklists – Condition photos, keys, meters, and a signed inventory form.
Routine Inspections – Calendar periodic walk-throughs with proper notice.
Maintenance Queue – Track requests; communicate ETAs and completion.
Document Everything – Notices, addenda, rent ledgers, and correspondence.
Drafting or revising residential or commercial leases.
Reviewing a lease-purchase or seller-financed transaction.
Resolving property-use issues (e.g., access, utilities, easements) through targeted documents.
Structuring or cleaning up LLC ownership and titling.
Many new landlords often overlook how to properly structure ownership of the investment property, you may need to form a Limited Liability Company. Also, having a sound lease is essential to your ongoing protection.
