Legal Question in Real Estate Law in Maryland

Re: Is there an advantage to forming an LLC for rental properties?

LLC stands for limited liability company. Like a corporation, its purpose is to protect its "members" from having their non-LLC (ie., personal) assets subjected to LLC debts or liabilities. Of course, if you finance the purchase of properties owned by the LLC, the lender will require personal guarantees anyway, so your LLC won't protect you in that regard. However, if your tenant sued you for some reason, or some vendor or contractor, and only the LLC was a party to the contract, you would be protected. As for tax advantages, you don't really get any and you do have to file a separate return as an LLC (with its own tax id #). But all in all it's probably worth it to set up the LLC if you intend to pursue this seriously.