What an LLC Actually Costs, State by State

Investors compare states on the filing fee, which is the number that matters least. The recurring costs are what decide whether one entity per property is a structure or a subscription.

TL;DR: Formation is typically $50–$500 once. What recurs is the annual report or franchise tax, a registered agent at $50–$300 a year, and a tax return if the entity is not disregarded. California's $800 minimum franchise tax is the outlier that breaks per-property structures there. And forming in Wyoming or Delaware for a property in another state does not avoid that state's rules — you must foreign-qualify where the property sits, paying both states. Form where the property is, unless a specific reason says otherwise.

The four recurring costs

Annual report or franchise tax. Ranges from nothing to $800+. This is the number that compounds across entities.

Registered agent. Required in every state where you are registered. $50–$300 a year per entity per state. You can serve as your own agent in your home state, at the cost of putting your address in the public record — which defeats part of the point if privacy motivated the structure.

Tax preparation. A single-member LLC is disregarded, so it rides on your return at no extra cost. Multi-member LLCs file a partnership return, which is a real fee per entity per year.

Bank account maintenance. Each entity needs its own account, and business accounts often carry fees or minimum balances.

Representative annual costs

Figures move — verify with the Secretary of State before relying on any of them.

State	Formation	Recurring annual	Notes
California	~$70	$800 minimum franchise tax, plus fee on higher gross receipts	Applies even to a disregarded LLC with a single rental
Texas	~$300	$0 for most small entities	Public information report required; margin tax has a high threshold
Florida	~$125	~$139 annual report	Late fee is steep and not waived
Wyoming	~$100	~$60 minimum	Popular, and see the section below
Delaware	~$90	$300 franchise tax	Built for corporations, not small rentals
Nevada	~$425	~$350	Higher than its reputation suggests
New York	~$200	Biennial ~$9	Publication requirement can cost $1,000–$2,000+ in some counties
Ohio	~$99	$0	No annual report
Illinois	~$150	~$75
Pennsylvania	~$125	~$7 annual report

New York's publication requirement is the one that catches people: newly formed LLCs must publish notice in two newspapers in the county of formation, and in downstate counties that can exceed the cost of everything else combined.

California is the one that changes strategy. Ten properties, ten LLCs, $8,000 a year before any other cost — which is why California investors typically use fewer entities with more properties each, or look at a Series LLC structure and its complications, and lean harder on umbrella coverage.

The Wyoming pitch, and why it usually fails

The pitch: form in Wyoming for strong charging order protection, low fees and no state income tax, regardless of where the property is.

The problem: an LLC that owns and rents real estate in a state is doing business in that state. You must foreign-qualify there — register the out-of-state LLC, appoint a registered agent, file that state's annual report, and pay its fees and taxes.

So a Wyoming LLC owning a California rental pays Wyoming's annual fee, a Wyoming registered agent, California's foreign qualification, a California registered agent, and California's $800 franchise tax. You have added cost and complexity and removed nothing.

Worse, the property state's law generally governs matters concerning real property located there, so the Wyoming protections you were sold may not apply the way the pitch implied.

	Property state LLC	Wyoming LLC + foreign qualification
Entities to maintain	1	1, registered in 2 states
Registered agents	1	2
Annual filings	1	2
Property state taxes	Yes	Yes — unavoidable
Lender comfort	Normal	More questions

When an out-of-state holding company does make sense: as a parent above property-level LLCs, in a holdco/opco structure, where the holding entity owns membership interests rather than real estate. That is a different fact pattern and it belongs to investors with real portfolio scale and an attorney designing it.

For everyone else: form where the property is.

Costs beyond the state

Attorney-drafted operating agreement. $500–$2,000 once. Template agreements are common and are also the thing a plaintiff reads closely when arguing the entity is a formality. Worth paying for the first one and adapting it.

Deed preparation and recording. A few hundred, plus transfer tax where it applies — which can dwarf everything else. See transferring a rental into an LLC.

Title endorsement or new policy. Several hundred, and only available if you ask before recording.

Insurance rewrite. Usually modest, sometimes a premium change when the named insured becomes an entity.

Financing. Conventional lenders generally will not lend to an LLC, so entity ownership tends to mean DSCR debt at 1.5–2.5 points higher. On a $250,000 loan that is $3,750–$6,250 a year — comfortably the largest cost on this page, and the one most often left off the comparison.

How many entities?

The trade is straightforward: more entities means better separation and more cost.

• One property, modest equity. Often no LLC. Umbrella policy, revisit later.
• Two to four properties. One LLC holding all of them is a reasonable middle.
• Growing portfolio, meaningful equity. Separate by risk and value — the property with the pool, the older multi-unit, and the high-equity ones on their own.
• California or New York. Fewer entities, heavier insurance, and a specific conversation with a local attorney.

Group by exposure, not by count. Two entities that separate your two riskiest assets from the rest do more than five arbitrary ones.

Final take

Budget the recurring cost, not the filing fee: annual report or franchise tax, registered agent, tax prep where applicable, and the financing premium that entity ownership usually brings. Form in the state where the property sits. Treat the Wyoming pitch as a claim to verify — foreign qualification is not optional, and it is what removes the saving. Verify current fees with the Secretary of State and the structure with a local attorney; both change, and neither is a website's call to make.