If you and your spouse are like many Florida couples, you own a rental property in addition to the home you live in. Whether it’s a condo that your family outgrew or the place one of you lived in before you were married, it may have proven to be a nice source of income.
Deciding what to do with a rental property in a divorce can be far less emotional than determining what to do with your own home. It can also be nice to have the issue of an additional piece of property in the mix of assets to divide.
That doesn’t mean it won’t be complicated. As you determine what to do with your rental property, here are a few things to consider.
Is it considered marital property?
If you purchased it during the marriage with joint assets, it belongs to both of you. However, even if one of you owned it prior to the marriage and you never added the other spouse to the title, they could still have a claim to a portion of it if joint assets have been used to maintain or upgrade it or pay for things like taxes and utilities.
Let’s assume that it’s marital property. As with the family home, if one of you wants to keep it, they can buy out the other one’s portion or give them something of equivalent value in the property division settlement. If you both could use the money that selling it would bring, you can do that and divide the proceeds.
Can you continue to work together as landlords?
Another option with a rental property is that you keep it and continue to rent it out together. That means you and your spouse will need to decide if you can work together after you’re no longer married. While it’s not the same as running a company together, you will still continue to be business partners.
It may make sense to hire a property management company to help you avoid having to deal with each other as much. However, if you decide to do it, it’s wise to have an agreement that outlines how profits and expenses will be divided and other details of managing a property.
Determining how to handle a rental property may be one of the biggest financial decisions of your divorce. Having sound legal guidance will help you make the best decision for you.