Some divorcing couples have not just their family home to deal with but a rental property as well. In some ways, it may be easier to reach an agreement on what to do with your residence than with a property that you keep primarily because it brings in a fair amount of income.
Many Wisconsin couples have a lakeside cabin, condo or house they rent to vacationers and perhaps use themselves for a few weeks a year. Sometimes they hold on to a previous home to rent out when they move to a larger place. If it’s marital property, you’ll need to decide what to do with it. If you can’t, a judge will have to decide for you.
Can you continue to work together?
The primary question is do you keep it or sell it. If it’s nearby, one of you may decide to move into it. If it’s not, the question is whether your finances require you to sell it or you can afford to keep it and continue to rent it. If you decide on the latter, the next question is whether the two of you can continue to work together as co-owners of the property.
This can be easier to do if you have a property management company that pays to handle the marketing, rental agreements, repairs and so forth. If you handle everything yourselves or even if you use a vacation rental site like Airbnb or VRBO, you’ll need to continue to work together to some degree if you keep it.
A written agreement is crucial
If you decide to keep the rental property, it’s essential to draw up an agreement that details how profits and costs will be divided as well as who will handle the various responsibilities. In a way, it’s like running a small business. You may need to put your feelings about each other aside for the continued profitability of the property. The more details you agree on and codify upfront in your divorce, the easier that will be.
As you decide how to handle multiple properties in your divorce, it may be wise to add a real estate professional and perhaps a financial advisor to consult with your legal team to help ensure that you’re working toward the best possible settlement for your long-term needs.
