In today’s society, many families invest their hard-earned money into buying rental properties as they can lease them to tenants to make a profit. For some families, rental properties are their primary source of income. With Airbnb and other platforms, rental properties are a valuable asset many spouses are unwilling to part ways with when divorcing. As such, divorcing couples often wonder what options are available for dividing their rental properties during property distribution. Please continue reading to learn how to separate your rental properties during your divorce and discover how our adept Monmouth County Division of Assets Attorneys can help you today.
How are rental properties handled during property distribution?
Before you begin your divorce negotiations, it is vital first to determine whether your rental properties are considered marital or separate property. If the rental properties were purchased during the marriage, they would be considered marital property and subject to equitable distribution. New Jersey is an equitable distribution state, meaning marital assets will be split in a way the court deems fair between each party. Therefore, if this type of asset were acquired during the marriage, both spouses would be entitled to an interest in it. Additionally, you will have to determine the value of each property, which can be done by hiring an appraiser who will evaluate the current market value.
From here, most couples will attempt to continue a business partnership, maintaining their rental and splitting the proceeds. Divorcing couples may opt for this option as rental properties are often lucrative investments. However, if you want to distance yourself from your former spouse, as you wish to enter this new chapter of your life with a clean slate, this option may not be the most appropriate.
How else can they be split in a New Jersey divorce?
If you still want to retain ownership over the rental properties to make a profit, you can buy them out of their stake if your former spouse is willing. You will likely have to refinance the properties as you will be responsible for all payments and fees related to the rental properties. This option is costly, and most individuals cannot afford to buy out their spouses, especially if there is more than one property.
If you cannot buy out your former spouse, you may consider dividing the properties between each party. This is a good choice for couples who can create a plan that divides the properties, allowing each person to retain full ownership. To make this option successful, couples must decide on a fair way to separate the properties to ensure both parties receive an equal share. However, this can be tricky as not every property holds the same market value, and there may be an odd number of properties.
Nevertheless, if couples cannot reach an agreement, the court will order that the couple sell the properties and split the sale proceeds. Before you make any decisions regarding dividing your rental properties, it is in your best interest to consult with a seasoned Monmouth County division of assets attorney from Paone Zaleski & Murphy. Our firm is prepared to help you obtain the best settlement possible.
