Co-owning a Rental
Many people are co-owners of rental property. Sometimes they start out that way for example when a couple moves out and decide to rent instead of sell a property. Other times, individuals get together to in order to raise enough money to purchase a rental property. Regardless of how it happens, renting a property can bring on lots of challenges and it is critical that you document responsibilities prior to beginning a joint venture.
It won’t take long for two people to have different ideas on how to accomplish a task. This can often mushroom into much bigger problems if not dealt with quickly. One good way to avoid issues is to sit down and talk with your partner(s) on all of the responsibilities of managing the rental property. Write down on paper who will do each task and what it will consist of. Each person should then sign the document acknowledging their agreement. As you think of new items, be sure to add them to the list.
Some of the topics you can include are:
Rent collection, deposits, fines
Banking, finances and taxes
Maintenance and repairs
Meeting with tenants on issues, for lease review and other communication
Finding new tenants
Meetings with inspections, court appearances, contractors
Oh yeah, and how profits will be divided!
Taking the time to do this now can be fun and educational and could help you avoid confronting a problem later. Be sure to update your document on a regular basis as the level of responsibility of each person becomes clearer.
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