Real Estate

Real estate is one of the assets with the highest amount of risk. Owning a real estate is far riskier than owning most other assets. Real estate is a very high liability asset.

Risk of renting real estate

Renting can produce much cash flow for the owner of the real estate property. However, the owner of the real estate property cannot control what his or her renters do. However, the owner of the real estate property can be sued and found fully liable for the harm he or she did not cause but is caused by his or her renters.

For example, if someone is injured on a real estate property, the owner of the real estate property can be sued in a lawsuit for all he or she has. Another example is that if one of his or her renters decided to have a side business selling drugs and that drugs hurt some kids, the owner of the real estate property can be found fully liable and sued out of all his life savings in a single lawsuit.

The owner of the real estate property has no control over what his or her renters do but he may fully liable for any thing that may happen as a result of their actions. This is a very risky set up for a real estate owner.

A real estate owner's defense

A real estate owner cannot prevent all his or her renters from causing harm. The real estate owners cannot even prevent proeple from suing him or her. The only thing he or she can do is to protect himself or herself when he or she is sued in a lawsuit. A real estate owner's only defense is having a family limited partnership.

Owning real estate in my name

In many places, it is common for a landlord to own many real estate properties and rent them out to renters. However many landlords own all the real estate properties in thier names or in the name of their family members. This is very risky. If either person is sued, some of the real estate properties will be wiped out in a lawsuit. If the real estate property is in someone 's name then that person is fully liable (100% liable) for any losses.