Your family home is likely the largest jointly owned asset you and your spouse will be dealing with in your divorce. However, in addition to deciding what you’ll do with that, you may have a rental property to deal with. Whether you rent out the first condo you bought together or you rent out a home upstate that you bought as an investment, you’ll need to decide what to do with it.
If you and your spouse are both on the title, have both contributed to the cost of maintenance and renovations and/or have shared the profits, it’s likely going to be considered marital property. You probably don’t have the same sentimental feelings about it that you have about your own home. However, you may appreciate how much money it’s brought you.
What are your options for the property?
If the rental property brings in more money in rent than you pay in taxes, insurance and other expenses, you may both want to keep it. Unless you decide to hire a property management company to take care of the tasks involved with being a landlord, that means you’ll need to continue working together to some extent to maintain the property and deal with renter issues.
Either way, you’ll need to work out an agreement on how income and expenses will be divided. If you continue to be hands-on landlords, you’ll want to detail who has what responsibilities to help minimize conflicts later.
If only one of you is interested in keeping the property, you’ll need to buy out the other’s share. Sometimes in divorce, one spouse will take over the rental property to live in if it’s convenient to work, kids and other obligations. Of course, if neither of you wants it, or you’d rather take advantage of the seller’s market we’re in, you can sell it and split the proceeds.
If you’re dealing with multiple pieces of real estate (your own home and other rental or investment properties), it may be wise to bring in a real estate professional to help ensure that everything is fairly valued so that you and your legal team can work toward a fair settlement – no matter what you decide to do with these properties.
