How To Set Up a Land Trust For Each Investment Property You Own

Setting up land trusts for each investment property you own is essential. One benefit of the land trust is to keep ownership of the property private. This way, the land title office can no longer let the whole world know that you own the property. Many people can enjoy privacy of ownership and do so for a few different reasons. The benefits are below:

  • You can keep ownership of one or more properties private.
  • You have the ability to transfer ownership of one or more properties to someone else easily.
  • You can avoid probate on one or more properties you own.
  • You can have many owners of one or more piece of property.
  • The owner keeps tax advantage.

Land Trusts Can Help Avoid Moving the Investment Property Title To and From More Than One Name

Although the above five benefits are the main reasons for setting up land trusts for each of your investment properties, doing so can help in other ways as well. One way setting up a land trust for each of your investment properties can help the owner is by avoiding "churning" of the title. Churning means that the title goes through many different hands in a short time period. The thing about the title going from one hand to the next and the next and so on is that a lender will not think twice about denying lending money for the property. This is because they may think that the title is going through many different hands really fast so as  to make the investment property look like it is worth a lot more than it really is. This is why it is good to set up a land trust for your properties.

How to Set Up Land Trusts for Multiple Investment Properties

You can create land trusts for multiple properties by using two legal documents. Before you start with the documents, first you need to decide the name you are going to be using for your properties. Once you find a trusted friend or family member, you then see a land trust attorney who will draw up a contract that states what is happening and the rights of both parties, you and your land trust.

Once you both look over this document and you both sign it, you then need to record the trustee deed. However, once these two steps are done, the world will no longer be told that you own any of the investment properties you own. Once this is done, you can enjoy all of the benefits mentioned above of using a land trust for each investment property you own.

Last Updated: 
March 26, 2018

Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.

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