Is it wise to jointly own a rental property with someone else?

This all depends on where you are, but you definitely want a contract that explains exactly what each person's percentage is, what each person's responsibilities are, what happens if there is a dispute, what happens if the property is sold, what happens if one wants to sell and the other doesn't, and whether one can sell all or part of their interest to a third party without the approval of the partner.

Depending on how ownership is set up, you can find yourself on the hook for legal expenses, the target of a lawsuit, etc.

Check with a lawyer and read some books on rental property ownership.

Wise?

It depends on the details.

If you own it together with no special structure you are exposed to the liability that either person might create. If they are married and get divorced you might end up with a new partner. If they die you could also end up with a heir as their partner.

You have issues related to how maintenance and other decisions will get handled.

If one does something that harms a tenant then your personal assets are exposed (cars, home, and other assets).

You can own a property with another person and still limit the liability if you structure things correctly and hold the title correctly.

Wealth Protection is a book that shows you some ideas. It is an easy read. Written by a RE attorney who is also an investor. He happens to be the moderator of the legal forum noted below. Pick up a copy of the book and then go find a lawyer to draft the documents correctly. Use the book as a way to focus your questions so you do not waste money having the lawyer explaining simple concepts (the book costs $20 while the lawyer will cost a lot more per hour). Bronchick is the author.

Your complicating ingredient is the earnings reason. on the proper point each and every thing's straighforward. You mutually own assets, you proportion interior the earnings and fees. Your earnings is proportionate on your possession interest, say 50/50. Your fees are your fees. One individual could have extra fees than the different, in the event that they're valid, allowable fees. you each and every and each rfile your proportion on schedule E (sort 1040). right here is the difficulty. the proper point regulations replace whilst there is not a earnings reason. there is not a earnings reason in case you does not pass into the association with an unrelated individual. would you pass into organization with an unrelated individual in an palms-length transaction, address a million/2 the loan, take a million/2 the apartment earnings, yet pay one hundred% of the fees? I doubt it. The project the place the reason for the association is kinfolk is which you will not be able to rfile any losses on your return. you are able to take your fees as much as the quantity of earnings you rfile. something of the losses are suspended. With residential apartment assets, it is straight forward to show a loss on your tax return mutually as construction fairness interior the valuables - a wonderfully valid for-earnings interest, in actuality taking the tax losses is one significant reason human beings placed funds into apartment assets. in case you each and every and each rfile the earnings, yet you have losses on your ingredient, those losses will not be able for use (could be carried over to the subsequent 365 days). With this subject, you would be worse off. once you're splitting issues flippantly, you will the two have the skill to jot down off your proportion of the loss. once you're paying each and every thing, there would be losses left on the table which you will not be able to apply. you provides your mom as much as $13,000 a 365 days as an outright present with out any tax outcomes for the two of you. you will evaluate giving her a latest interior the quantity of besides the fact that her proportion of fees would be. Then she writes a verify each and each month the two to you or the loan organization so there's a paper path. that must be a valid thank you to pay a similar volume yet save the earnings reason and permit losses.

It isnt wise-i'm presently in such a case and because i am more responsible, i haved up paying more than i thought i would especially with the bills . it would have helped if we actually had a written document specifying what our responsibilities would be. Why cant you get a placealone?