A corporation is generally an inefficient way to take title to a property. Everyone seems to want to form a corporation, but resist the temptation. A corporation is subject to double taxation; that is, they pay tax at the corporate level and any dividends that are distributed to stockholders are taxed as well.
Corporations are unable to flow through any tax losses to be used by individual shareholders. The main reason that people form corporations today is to avoid personal liability and they do so out of ignorance. There are some simple ways to avoid liability, even when you are investing as an individual. One example, is a nonrecourse loan where the lender's sole recourse is against the property itself and not against you as an individual. Another way to protect yourself would be to get liability insurance policies with large limits.
If you shop around, you can probably find an insurance company that will write a one million dollar umbrella policy that could be attached as a rider to your homeowner's policy, naming all of the specific properties you own.
Unless you own a large number of properties, this umbrella policy probably can be purchased for as little as $75 to $100 a year.There are a number of things you can do as an individual to overcome the problems associated with liability in real estate ownership. If you form a corporation, you are going to find that the cost of forming that corporation, as well as the cost of lost tax benefits, is going to far offset any comfort that you may have received from forming the corporation.
What You Need to Know About Corporations