4 Things to Consider When Co-Owning the Property Rentals

Sometimes you come across a good real estate deal, but you face the problem of shortage of funds. It is then that you consider sharing or co-owning your Edmonton property rentals investment. Co-ownership of rental properties appeals to many aspiring landlords as it reduces the risk, increases the purchasing power, and divides the burden of financial and managerial responsibilities.

Co-owning rental properties can be an incredible experience, but only if it is done right. While it may seem appealing to share your investment with someone else, there are several factors to be considered before coming to a decision. As one of Edmonton real estate management companies, here’s our advice.

Do Your Partner’s Goals Match with Yours?

In any partnership business, the vision and values of each partner must align with each other. The same holds true for co-owning a property. It is important to meet your prospective partner and understand their goals. For example, do they seek to establish an additional income line or do they aim to trade in real estate for long-term profits? Discuss aspects related to a rental business. If their goals and values match yours, then it may be a good idea to go ahead with the partnership.

How are Responsibilities Going to be Divided?

Think they will be divided equally-  50-50? Although you have mentioned an equal share of responsibilities on paper and in the beginning, eventually it may end up being split unevenly. At anytime, a partner feels that they are spending more effort towards property management that the others, then it can lead to a dispute. Plus, some partners claim that they will share responsibilities equally, but end up being unavailable most of the time. This leaves an additional burden on you. It’s best to outline responsibilities specifically in your agreement to avoid issues.

What About Mortgage Liabilities?

If you and your partner plan to mortgage the property, you will co-sign the mortgage and be responsible for your share of liability. If your partner fails to honor their liabilities, you will still have to pay your share. Plus, if you are, for some reason, unable to make payments, then the bank may seal your personal assets to secure the debt. Analyze your financial status and the credit history of your prospective partner to prevent major issues.

Do You Have a Contingency and Exit Plan in Place?

Contingency and exit strategies must be a vital part of any partnership. Imagine one of the partners die. In such an event how is their share managed? Does the other partner gain complete ownership or is it bequeathed to a living relative? Plus, you must also have a plan for cases where a partner backs out and changes their strategies. Evaluate these factors and list these strategies clearly in the agreement. It will help you make an informed choice.

Rent with a Real Estate Management Company

Weighing the pros and cons and understanding your prospective partner’s goals and preferences can help you arrive at the right decision. Alternatively, if you have minor Edmonton property rental issues and do not want to part with your share, you can hire one of the real estate management company in Edmonton.