How to set up an LLC for your rental property in Indiana

If you own rental property in Indiana—or plan to buy soon—you’ve probably heard that forming an LLC can be a smart move. But how exactly do you set up an LLC for a rental property here? What are the costs, the steps, and the ongoing requirements? And does an LLC really protect you the way you think it does?

In this guide, we’ll walk through everything Indiana landlords and real estate investors need to know about LLCs, with a focus on the specifics for Hoosier landlords. We’ll cover key details like the Indiana LLC filing fee, when annual reports are due, and how to get your EIN. By the end, you’ll have a clear picture of whether an LLC makes sense for your rental business and how to get started.

What an LLC is and what it can protect you from as a landlord

An LLC—or limited liability company—is a popular business structure that blends some of the liability protections of a corporation with the simpler management and tax flexibility of a partnership or sole proprietorship. For landlords, the biggest appeal is liability protection.

An LLC is generally designed to separate personal assets from business liabilities, which may help protect your personal assets in many cases. For example, if a tenant sues over an injury on the property, the lawsuit may generally target the LLC’s assets and not your personal bank account or home. This is what people mean when they ask, "what does LLC protect you from?" It’s about limiting your personal exposure to lawsuits and debts related to the rental.

That said, an LLC won’t protect you from everything. If you personally guarantee a loan, commit fraud, or don’t properly maintain your property, you could still be personally liable. Also, an LLC doesn’t replace good insurance—which is why many landlords combine LLC protection with landlord insurance policies in Indiana.

If you want to learn more about whether an LLC is right for your rental business, check out our full guide on should landlords use an LLC.

Step-by-step: how to set up an LLC for a rental property in Indiana

Setting up an LLC in Indiana involves a few clear steps. Let’s break it down:

1. Choose a name for your Indiana LLC

Your LLC’s name must be unique and include “Limited Liability Company,” “LLC,” or “L.L.C.” You can check name availability on the Indiana Secretary of State website.

2. Designate a registered agent

Indiana requires your LLC to have a registered agent with a physical address in the state. This person or company receives official government and legal documents on behalf of your LLC.

3. File articles of organization with the secretary of state

The next step is officially registering your LLC by submitting the Articles of Organization. This document officially creates your LLC in Indiana.

4. Create an operating agreement (optional but recommended)

Indiana doesn’t require an operating agreement, but it’s a good idea to outline ownership and management of your rental LLC.

5. Get an EIN from the IRS

Your LLC may need an Employer Identification Number (EIN) for tax purposes—even if you don’t have employees. You can apply for one online directly through the IRS website.

6. Register for Indiana state taxes if applicable

Depending on your rental activity and if you have employees, you may need to register for state taxes at the Indiana Department of Revenue.

7. Comply with ongoing requirements like annual reports

Indiana LLCs must file an annual report each year to keep their status active.

How much does it cost to set up an LLC in Indiana?

One of the first questions landlords ask is how much does it cost to set up an LLC? Here’s a quick breakdown of Indiana-specific costs:

• LLC filing fee: $100 — This is the fee to file your Articles of Organization with the Indiana Secretary of State. You can file online or by mail.
• Annual report fee: $50 — Indiana requires LLCs to file an annual report every year, which costs $50 if filed online.
• Registered agent fees: If you use a commercial registered agent service, expect to pay $100–$300 per year.
• Other optional costs: Drafting an operating agreement, hiring a lawyer, or obtaining a business license may add to costs.

Compared to other states, Indiana’s fees are moderate and fairly straightforward.

How long does it take to set up an LLC in Indiana?

In Indiana, the processing time for filing your Articles of Organization is usually quick:

• Online filing: Typically processed within 1–3 business days.
• Mail filing: Usually takes 5–7 business days or longer, depending on mail speed.

Online filing is often faster, but you may want to choose the method that best fits your needs.

What are articles of organization and how to file articles of organization in Indiana?

The Articles of Organization is the key document that officially creates your LLC with the state. It includes basic information like:

• The LLC’s name
• The registered agent’s name and address
• The LLC’s principal office address
• The names of the managing members or managers (optional)

You can file your Articles of Organization with the Indiana Secretary of State either online through the INBiz portal or by mailing a paper form.

Filing online is faster and more convenient. After your filing is accepted, your LLC officially exists under Indiana law.

Do I need a lawyer to start an LLC, or can landlords DIY the process?

Many landlords wonder if they need a lawyer to set up an LLC. The good news: you don’t have to hire a lawyer to form an Indiana LLC. The filing process is designed to be user-friendly, especially with online options.

That said, a lawyer can be helpful for:

• Drafting a detailed operating agreement
• Advising on tax structure and asset protection strategies
• Handling complex ownership or partnership issues

If your rental portfolio is simple, you can probably handle forming the LLC yourself. Just make sure you understand the basics and keep good records.

How to get an EIN for an LLC that owns rental property

Once your LLC is approved by the state, you may want to get an EIN to open a bank account and handle taxes. An EIN is like a Social Security number for your business.

Getting an EIN is free and straightforward. Just visit the IRS EIN application page and fill out the form online. You’ll get your EIN immediately.

Many single-member LLC owners find it helpful to get an EIN to separate personal and business finances.

Do LLCs need annual reports and other ongoing compliance in Indiana?

Yes, Indiana LLCs must file an annual report with the Secretary of State every year. The report keeps your LLC in good standing and updates the state on your business info.

• The annual report fee is $50 if you file online.
• The report is due by the end of the anniversary month when your LLC was formed. For example, if you formed your LLC in June, your report is due by June 30 each year.

In addition to annual reports, keep in mind:

• Maintain a registered agent with a physical Indiana address.
• Keep business records separate from personal finances.
• Renew any necessary licenses or permits for your rental property.

Failing to file your annual report can lead to your LLC being administratively dissolved.

S corp vs LLC for landlords: what’s the difference?

Many landlords ask about S corp vs LLC when choosing a business structure. Here’s a quick overview without getting into tax advice:

• An LLC is a flexible business entity that protects your personal assets and allows pass-through taxation by default.
• An S corporation is a tax election you can make with the IRS after forming an LLC or corporation. It can sometimes reduce self-employment taxes but comes with additional paperwork and restrictions.

Most Indiana landlords start with a simple LLC for liability protection and ease of management. Because tax benefits vary based on individual circumstances, consider consulting a qualified tax professional before making decisions about an S corp election.

LLC vs umbrella insurance for rental property risk management

While an LLC limits your personal liability, it doesn’t replace insurance. Many landlords wonder about LLC vs umbrella insurance to cover risks.

• LLC protection limits your personal exposure to lawsuits related to the rental business.
• Umbrella insurance provides an extra layer of liability coverage beyond your standard landlord insurance policy.

Ideally, you want both: an LLC for legal protection and landlord insurance in Indiana for financial protection against property damage, liability claims, and more.

If you’re interested, here’s a detailed look at LLC vs umbrella insurance so you can decide what fits your risk management strategy.

When an LLC makes sense for landlords in Indiana—and when it may not

An LLC isn’t right for every landlord. Here are some simple considerations:

When an LLC makes sense

• You want to protect your personal assets from lawsuits related to your rental property.
• You’re building a portfolio of properties and want to keep ownership separate and organized.
• You want flexibility in management and tax options.
• You want to make partnerships or investors easier to manage within one entity.

When an LLC might not be necessary

• You only own one property and have minimal liability risks.
• The cost and paperwork of forming and maintaining the LLC don’t justify the benefits.
• You prefer to keep things simple and rely on insurance for liability protection.

For most Indiana landlords, an LLC is a valuable tool, but it’s a good idea to review your specific situation with a professional.

Next steps: review your insurance and LLC setup

If you’re thinking about how to set up an LLC for a rental property in Indiana, you’re already on the right track to protecting your assets and your business.

Once your LLC is set up, you may want to review your insurance coverage with a qualified insurance agent. You can learn more about landlord insurance in Indiana to make sure you’re fully covered.

And if you want to dive deeper into whether an LLC is right for your rental business, check out our guide on should landlords use an LLC.

Official resources for Indiana LLCs

• Indiana Secretary of State business services: https://inbiz.in.gov
• Indiana Department of Revenue: https://www.in.gov/dor/
• IRS EIN application: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

Starting an LLC for your Indiana rental property can be straightforward with the right info. Take your time, stay organized, and protect your investment wisely!