If you and your spouse own a rental property, it may be a good source of income for the two of you. Whether it’s a condo on Atlantic Beach or a cabin along the Blue Ridge Parkway that you rent to vacationers or a first home that you now rent to tenants, determining what to do with a rental in your divorce can be one of your more challenging issues.
In most cases, rental properties are considered marital property in which both parties have a stake. If you’ve determined, based on the legal guidance you’re getting, that this is marital property, the next step is to determine its current value. That way you know what kind of asset (or liability) you’re dealing with before you decide what to do with it.
What are your options?
Essentially, there are three common choices for handling rental property as you end your marriage. These are:
- Continue to rent it out and divide the income: Since this requires being in business together, which can be tricky and unpleasant, you may want to hire a property management company to handle the administrative matters or develop a business agreement that details each of your responsibilities and rights.
- Sell the property: This can help the two of you make a clean break from one another and provide some extra money at a time when you may both need it.
- One spouse buys out the other: If only one of you is interested in keeping the property, this might be the best solution – if one of you may not be able to afford it on your own.
If you prefer the last choice, you might be able to arrange for one spouse to keep the family home while the other keeps the rental property. There are all kinds of ways that you can negotiate with your assets so that you each get the things of value that you want.
When dealing with any real estate – and certainly with multiple properties – it’s wise to seek guidance not only from your attorney but from real estate and financial professionals. All can help you make the choice that’s best for you in the long run.