Is Delaware or Nevada better for a real estate LLC?

For most investors, neither. Both add formation costs, annual fees, and a paid registered agent on top of the foreign-LLC registration you’ll still owe the state where the property is located. Between the two, Delaware is cheaper year to year ($300 vs roughly $350 plus agent fees), but the better answer is usually your home state.

Do I have to register my out-of-state LLC where my rental property is?

Yes. Owning and leasing property is transacting business, which triggers foreign registration — in Texas, a $750 filing plus an ongoing registered agent and franchise tax reports.

Does forming in Nevada or Delaware reduce my taxes?

No. Income from real estate is taxed based on where the property is located and where you reside, not where the LLC was formed. A Nevada LLC owning Texas property gets no tax benefit a Texas LLC doesn’t already have.

Should each property have its own LLC?

Separating properties prevents one property’s liability from reaching the others. A Texas series LLC can accomplish that isolation at lower cost than forming multiple standalone LLCs, if you maintain clean records for each series. Reidel Law Firm forms Texas LLCs and series LLCs for real estate investors on transparent flat fees, so you know the full cost before we start. If you’re structuring a property purchase or cleaning up an out-of-state entity, start with our Texas business law services.

TEXAS BUSINESS LAW

Best State to Form a Real Estate LLC: Delaware vs Nevada

Schuyler 'Rocky' Reidel July 23, 2023 6 min read

The best state to form an LLC for real estate is almost always the state where the property sits — not Delaware, no