Should I Start an LLC for My Real Estate Photography Business?

Starting a limited liability company (LLC) for your real estate photography business can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a real estate photography business, lawsuits can arise from things like photographing an individual without their permission or uploading photographs of a client’s property prematurely without their consent.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your real estate photography business seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

Do I Need an LLC for a Real Estate Photography Business?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should start an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Real Estate Photography Business

By starting an LLC for your real estate photography business, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Real estate photography businesses will benefit from liability protection because real estate businesses, including real estate photography businesses, face a variety of risks associated with entering onto and engaging with client properties. Distributing images without client consent could also be a point of financial liability for your business.

Example 1: A client sues you for uploading pictures of their property online without permission. If the court finds you guilty and levies a fine against you, limited liability protection will prevent the effects of the incident from affecting your private assets.

Example 2: You took out a loan to upgrade your real estate photography business but could not repay the loan due to some business setback. When creditors come for their money, your limited liability protection will prevent them from having access to your private property if you did not personally guarantee the loan.

Example 3: A client slipped and fell while walking into your office, resulting in a serious head injury. She has sued you for damages because you did not put up a slippery floor sign. In the event of a guilty verdict, limited liability will confine the effects of the incident to only your business assets.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Real Estate Photography Business

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a real estate photography business owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Real estate photography businesses rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from an LLC protects your personal assets, not your business assets.

For a real estate photography business, insurance is needed to cover their business against clients’ and employees’ lawsuits, damage to property, and other financial losses that are peculiar to them.

Common Situations Business Insurance May Cover for a Real Estate Photography Business.

Example 1: During a customer photo shoot, your client trips on a power cord. This causes a light tower to fall and injure the client. General liability insurance would cover you against bodily injury claims and potential payouts.

Example 2: You are hired as a personal photographer for a high-profile property. After the photoshoot, pictures from inside the house, taken on a smartphone, appear on social media. The owner accuses you and your team of taking and posting the pictures, then files a lawsuit against your business. A general liability policy may be able to cover the legal fees and any money awarded to the property owner.

Example 3: While taking pictures of a client’s property, you accidentally crack an antique mirror. The mirror is one-of-a-kind and quite expensive. Your general liability policy may be able to cover the cost of the damaged antique.

Other Types of Coverage Real Estate Photography Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all real estate photography businesses should obtain:

Professional Liability Insurance

Professional liability insurance, commonly known as errors & omissions (E&O) insurance, is a coverage every real estate photographer should consider. As a photographer, events often occur that are out of your control. If a memory card fails, causing you to lose pictures from an event, you could face a court challenge. Whether from human error or faulty equipment, a professional liability policy protects you from such claims.

Commercial Auto Insurance

Real estate photographers use their own vehicles to drive from one client's home to the next. Since most personal auto policies will not cover business pursuits, your state will require you to carry a certain level of commercial auto insurance.

In addition to requiring insurance, your state may also mandate the minimum coverage all drivers must carry. To shield you properly against potential losses, consider your personal and professional financial situation when selecting your commercial auto insurance limits. Consider selecting a limit higher than required by your state.

Home-Based Business Insurance

Since this type of business involves regular work in the field, many real estate photography business owners opt to operate out of their homes. If you then store your equipment in your residence when it’s not in use, you’re leaving a potential insurance coverage gap. If your home suffers a loss or an accident occurs as a result of business activities, you may find you are uninsured or underinsured for these losses. Home-based business insurance fills in those gaps, protecting against losses excluded by a standard homeowners policy.

You can typically purchase home-based business insurance as a part of a business owner's policy (BOP). For an additional premium, some homeowner’s insurance policies offer this coverage as a rider (an extension of coverage).

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance and commercial auto insurance.

Read our Business Insurance for Real Estate Photographers article for more info.

Starting a real estate photography business will require an initial investment of about $10,000. This investment will cover the purchase of a camera, lenses, flashlights, tripod stands, and other photography supplies. You can also start out as a sole photographer to cut costs by eliminating the need for a physical location.

Visit our How to Start a Real Estate Photography Business guide to learn more about the costs of starting and maintaining this business.

Up to the point where you may decide to open a brick-and-mortar location, ongoing expenses will be minimal and include costs such as website maintenance, editing software, insurance, marketing materials, and employee payroll.

Learn more about running a real estate photography business.

Photographers make a profit from the sale of images or sets of images to individuals selling their properties. Rates for photographs will often depend on the type of property that is being photographed.

Learn more about starting a real estate photography business.

Sometimes run by individuals, sometimes run by teams, real estate photography businesses take photos of both residential and commercial properties for real estate purposes.

Real estate photographers have an average annual profit of $50,000.

Learn more about starting a real estate photography business.