Think Like an Owner: What Is the Best LLC Structure For Your Rental Property?

This Week’s Ownership Mindset: Real Estate Is a Business, So Treat It Like One

When I bought my first rental property, I was still thinking like a physician. I ran the numbers, appreciated the potential tax benefits, and figured I’d just add the property to my growing investment list. But I didn’t immediately see the need for a legal structure beyond personal ownership. That was a costly mistake, one that I’ve since corrected and now teach others to avoid.

If you're a physician entrepreneur building a real estate portfolio, one of your first strategic decisions should be the legal structure you choose to hold your properties. It’s not just about asset protection, it's about thinking like an owner, and structuring your assets like a business.

So, what's the best LLC structure for rental properties? The answer isn’t always simple, but thanks to excellent content like this Semi-Retired MD article, you can begin to approach the topic with confidence and clarity.

Let’s unpack it from a clinician-entrepreneur lens.

The Core Mindset Shift: Rentals Are Not Just Investments—They’re Micro-Businesses

This shift is fundamental. Too often, we think of rental properties as passive income sources that we simply "hold and forget."

But for PEA-SimpliMD members, we reframe rentals as active micro-businesses that require legal planning, tax strategy, operational oversight, and professional structures. This mindset allows you to:

• Maximize tax deductions and asset depreciation

• Limit personal liability and safeguard your other assets

• Create intergenerational wealth transfer pathways

• Develop professional systems and exit options

If you haven’t yet read our foundational piece, 10 Essential Rules for Rental Property Success, go check it out now.

Meet Dr. Robb: A Case Study in Real Estate Structuring

Dr. Robb, a hospitalist from Texas, reached out to me last year through PEA-SimpliMD coaching. She had three long-term rental properties in her personal name and was about to close on a fourth.

During our session, I asked: "What’s your legal structure?"

Her response? "My CPA said I didn’t need one… yet."

Together, we reviewed her portfolio and identified multiple risk points: tenant lawsuits, property damage, and even inheritance confusion should something happen to her unexpectedly.

Dr. Robb took our advice. She created a holding company (a parent LLC) and transferred each property into its own LLC, all disregarded entities for tax purposes. Now she has layered liability protection, clean books for each asset, and a smart plan to scale her portfolio further.

What the Experts Say (and Why It Matters to You)

The team at Semi-Retired MD lays out several viable structures in their helpful article here:

• Single LLC: Simple, but all assets share liability risk.

• Multiple LLCs: Each property is protected separately, but costs and admin increase.

• Series LLCs: One parent LLC with internal segments, cost-effective, but not available in all states.

• Holding Company Model: A parent LLC owns the property-specific LLCs. Offers scalability and clear separation.

Each has pros and cons, but the common theme is that doing nothing is not an option. If you own real estate in your personal name, you’re exposing yourself to unnecessary risk.

Still Thinking Like a Landlord? It’s Time to Think Like a CEO

The legal structure is just the beginning. How you organize your business tells the story of how you think about ownership.

• Do you have a written SOP for tenant screening?

• Do you track expenses and categorize them for Schedule E efficiency?

• Have you done a cost segregation study to accelerate depreciation?

All of these strategies are part of the curriculum in our Vacation Rental Mastery Toolkit inside the PEA Builder and PEA Pro memberships.

Your Next Step as a Real Estate Entrepreneur

If you're just beginning your journey, grab our free digital book "Why Every Doctor Should Form a Micro-Corporation" to rewire your mindset around personal risk and professional control.

Already own one or more properties? Then it's time to scale like a pro. Consider our $499 Business Strategy Meeting to review your current legal, tax, and operational setup and map a custom structure for your next phase.

Or join the PEA Explorer Membership today → Get Started Here

Throwback Wisdom:

If you missed this earlier resource, revisit: 10 Essential Rules for Rental Property Success

Learn the basics of cash flow, property selection, and risk management—from a physician-entrepreneur lens.

Identity Shift: From Employee to Real Estate CEO

“Still thinking like an employee? It’s time to own your time, your work, and your income.”

Start Your Transition with PEA Explorer Membership →

Or download our “Doctor, You Are A Business” course.