How to protect yourself as a landlord

As a landlord, how to protect yourself in the event of mis-fortune or lawsuit arises. I am a newbie in the rental business and just would like to share what I have learned over the past months. More importantly, I would like to hear others’ opinions and practice.

Option 1: Form a limited liability company
1.a). LLC
•Pros:
o Protect your personal assets
o Flexible in forming and filling out tax
o Hide your identity on the rental property
•Cons:
o Higher annual fee (compared with S-corp, at least in my state), about $200-300.
o Need to pay state and local tax (if your net business income is positive) as well as asset-based tax
1.b). S-corp
•Pros:
o Protect your personal assets
o Lower annual fee (compared with LLC), about $20-50
o Hide your identity on the rental property
•Cons:
o More documentation required
o Need to pay state and local tax (if your net business income is positive) as well as asset-based tax


Option 2: Buy Umbrella Insurance
•Pros:
o Easy to do, just one phone call away.
o One million (or multiple million liability) can cover any suits from any issue
o No other tax to pay.
o
•Cons:
o Cannot hide your identity on the rental property
o Cannot separate your personal assets from your investment
o Relatively more expensive (tax issue is not considered). One has to bump up liability on primary house, cars, etc to meet the minimum requirement (For me the incremental costs are about $400-500 in total)

Hard to decide which one to choose. I am kind of leaning toward S-corp, but would like to hear from you guys. Also, I heard that Trust is another way to protect, but I know little about it and hope any experts can speak up here too.