Many choose to rent their residential real estate without using a legal entity. And that’s fine because it’s quick and easy. But if you are planning to rent out your real estate property for more than one term, you should consider forming a legal entity (preferably an LLC) for two basic reasons:

(1) Eliminate the unlimited personal liability for all debts or claims that arise from the ownership or operation of your residential real estate property; and
(2) Signal to your tenant(s) that you mean business, as you are a business.