Can a holding company own multiple rental property LLCs?

Yes, it's allowed. A parent LLC can be the sole member of each pproperty LLC. The holding company doesn't need to be in the same state, but you'll want to check registered agent requirements in each state where the property LLCs are formed.

It's a common setup. The holding company owns the membership interests in each property LLC. Privacy-wise, it can help because the property LLC's public filing might list the holding company as member instead of you personally. But if the holding company is also registered in a state that publishes member info, you haven't gained much unless you layer it with a trust or nominee.

What's the actual benefit over just having one LLC own all the properties? Seems like more filings and fees for not much difference.

Liability isolation. If one property has a lawsuit, having each in its own LLC keeps the other properties out of that liability. The holding company adds another layer so the ownership chain isn't as obvious.

I looked into this last year. The holding company can own multiple property LLCs, but you need to make sure the holding company itself is properly registered and has a registered agent. Also, some states require the the property LLC to disclose the holding company's name and address on the annual report, which can be looked up.

Correct. True anonymity usually requires a trust or a Wyoming holding company with a nominee manager but even then it's not foolproof. You also have to consider the registered agent's address, which becomes public.

Does the holding company need to be in the same state as the properties? I have rentals in two different states, and I'm trying to avoid forming LLCs in both if I can.

Generally, the property LLC should be formed in the state where the property is located, because that's where the liability arises. The holding company can be in any state, but you'll likely need to register it as a foreign entity in the states where the property LLCs operate. That can get expensive, though.

So basically you're paying for multiple LLCs, multiple registered agents, and foreign registrations. The privacy gain seems marginal unless you go all in with a trust.

That's what I'm worried about. The fees add up fast. But if one property gets sued, the others are protected. I guess it's a cost of doing business.

One more thing: make sure the holding company has its own EIN and bank account, and that the property LLCs are treated as disregarded entities for tax purposes if you're the sole owner. Otherwise you're filing multiple tax returns for no reason.

And keep the the ownership percentages clean. If the holding company owns 100% of each property LLC, you avoid having to disclose other members. If you bring in partners, the privacy picture changes.