There are a number of ways to legally protect your real estate investment that cannot be utilized with other standard investments. For instance, with stocks and bonds, if the company that you have invested with, has a bad year, then you are simply out of luck.
Property insurance is often a big cost in real estate investments, but is often covered by your property's income. It is essentially free to you, since it is often considered an operational cost of the property, and therefore can be a tax-deductible expense depending on where you live.
Insurance is one of life's necessities that go beyond the realm of real estate investing. Most people don't think about the fact, that real estate is one of the few investments that you can insure. When you invest in real estate (and you have insurance), you have the peace of mind, knowing that if your real investment is destroyed, you are covered for any losses. Given the fact that you carry the proper amount of insurance, you should be able to claim your losses for the actual value of the asset before the loss, and during the loss.
Another legal advantage of real estate investing, is that you can take ownership of this investment in the name of an LLC, or a legal corporation (such as an IBC - International Business Corporation). Holding ownership to your real estate asset in a legal corporation, allows you to protect your personal wealth by individualizing and protecting your asset as well. If for any reason, you were to be sued, your other personal assets (such as,) your house, bank accounts, and investments, would be protected because they wouldn't be property of your legal corporation.
Each and every property that you buy should be placed in its own IBC or individual corporation. That is one of the greatest ways to protect your wealth. Imagine you own multiple investment properties and one of your residents fell in the shower and became injured. If all of your properties were under a single entity (the same legal corporation), then that resident would have the legal right to pursue damages based on the entire asset value of all your investments in that entity. If, however, each property was its own legal entity, that resident should only be able to seek damages from that entity. Your other holdings would not be affected.
In addition to the legal protections that an IBC (International Business Corporation), provides, there are also many other distinct advantages, that may be available to you. Since each person has a unique circumstance, I cannot cover all scenarios in this short blog insert. I therefore recommend contacting me directly for a one-on-one personal consultation. I will be happy to assist you in becoming more knowledgeable about how to protect your assets, and what advantages may be available to you.