Deciding what to do with the family home can be complicated enough in divorce. When a couple owns more than one property together, that can complicate things even further. Many couples own a property that they rent to full-time tenants. Some own a vacation rental property.
Determining what to do with a rental property often involves looking at the same options as with the family home. The couple can decide to sell it. One spouse can buy the other one out. One spouse can keep the property and give the other something else of equivalent value.
Another workable option for some couples is to keep the property and continue to rent it out. That essentially means continuing to have a business relationship after the marriage is over.
If the property brings in a nice income stream and isn’t a source of multiple headaches (like ever-changing or difficult tenants or constant repair and maintenance issues), it can be hard for either spouse to give up.
Can you work together after divorce?
If this scenario applies to you and your spouse, it’s then necessary to determine whether you can continue to work together as landlords. You may consider hiring a management company to minimize your obligations. Of course, that means sharing a chunk of the rental income with a third party.
What you will need to do, even if you bring in a management company, is draw up an agreement detailing each of your responsibilities and obligations, how decisions will be made, how income and expenses will be divided and more.
Before you decide what to do with any rental property that you jointly own (or even one that may be in only one of your names but that the other spouse may have put some of their own money and time into), it’s wise to consult with real estate and financial advisors in addition, of course, to having sound legal guidance to protect your interests.