Determining what to do with your home will likely be one of – if not the – most important property division decisions that you and your spouse will make during your divorce. If you have a vacation property somewhere, that may be a similarly consequential concern. Any property where you’ve spent considerable time as a family and maybe watched your kids grow up can cause your decision-making around it to be as emotional as it is practical.
And what if you and your spouse also have one or more rental properties? Unless one of you owned the home that you now rent out before marriage and it’s determined to be separate rather than community property, it’s likely that you’ll need to agree on what to do with it. If you can’t, a judge will need to decide.
What are the options?
For the most part, your options for a rental property are the same as for your family home:
- You can sell it and divide the profit.
- One of you can buy out the other one’s share of the home.
- One of you can keep it and give the other spouse assets that are value for their share of the home.
There’s another possible option for rental property, which may or may not be right for you. You can keep the property and continue to rent it out. This will mean that you’ll either need to continue to work together as landlords unless you want to pay a management company to do that (or already do). If you decide to do that, you’ll want to put a legal agreement in place detailing things like how responsibilities will be split or delegated, how income and expenses will be divided, how decisions will be made and more.
It’s a lot to think about. If you’re considering what to do with multiple properties as you divorce, it’s likely wise to have your own financial and tax advisors in addition to experienced legal guidance.