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  • Property A: 3-bed flat in a decent location, say, worth $100k

  • Property B: 2-bed flat in a marginally worse (but still decent) location, say, worth $75-80k

Person X and person Y both inherited 50% of the above properties and now there are discussions about how to best manage the situation. Without getting into details, the options agreed between X and Y are the following:

  1. Person X takes full ownership of property A and gives up their inheritance rights of property B. Which means Person Y will then have full ownership of property B. No difference has to be paid from X to Y, because they agreed they don't want to.

  2. They both keep the current split of 50% each for each property

Which option is better / more financially sound for person X?

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    do either of the people intend to live in either property? Are they going to be rented? How would the work and expenses be split in that case? Who would make the decisions when ownership is 50-50? Are both locations close to where both people live and work now? Do X and Y have a history of making decisions together without conflict or drama?
    – Kate Gregory
    Aug 27, 2019 at 16:50
  • Did person X give any reason for refusing the seemingly great deal being offered?
    – stannius
    Aug 28, 2019 at 20:34
  • If I were person Y and were paranoid, I might worry that person X was setting up to take advantage of me like in money.stackexchange.com/questions/104501/…
    – stannius
    Aug 28, 2019 at 20:34

2 Answers 2

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Property A: 3-bed flat in a decent location, say worth $100k

Property B: 2-bed flat in a marginally worse (but still decent) location, say worth $75-80k

Person X and person Y both inherited 50% of the above properties and now there are discussions about how to best manage the situation. Without getting into details, the options agreed between X and Y are the following:

1) Person X takes full ownership of property A and gives up their inheritance rights of property B. Which means Person Y will then have full ownership of property B. No difference has to be paid from X to Y, because they agreed they don't want to.

2) They both keep the current split of 50% each for each property

Which option is better / more financially sound for person X?

In option #1, Person X winds up with $100K of assets, and Person Y ends up with $80K of assets.

In option #2, Person X winds up with $100K/2 = $50K + $80K/2 = $40K, for a sum total of $90K in assets. Person Y has the same amount of assets.

Thus, all else being equal, option #1 is obviously more financially beneficial for Person X, because he gets $10K more assets.

Equally important to the raw financials is the interpersonal: if, for example, they both own 50% of the properties, and Person X is obligated by agreement to do or pay for some tasks around the flats, and doesn't, that will cause strife between the two parties, which will spread if they are family or have many common friends.

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    It's not just getting $10K more. Single title property is easier to manage... Decision on renting, renovation, sale can be done with out any consultation.
    – Dheer
    Aug 27, 2019 at 3:45
  • @Dheer maybe you should elaborate in a separate answer, because this is an important point.
    – kirbby
    Aug 27, 2019 at 6:23
  • @kirbby I mentioned that in an answer I've since deleted, back when the Question had a lot more about interpersonal issues. OP edited that out, so I created a new answer.
    – RonJohn
    Aug 27, 2019 at 13:13
  • @RonJohn If appropriate, please include it in your answer. It's already accepted and it doesn't make sense to me to add another answer.
    – Dheer
    Aug 27, 2019 at 15:42
  • Why do you quote the entire question in your answer? Defense against further modifications?
    – stannius
    Aug 28, 2019 at 20:12
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As nearly everything, it has pros and contras.

The benefit of having two assets is to be more diversified. If you have a tenant which ruins your property, and it is your only property, you are in a bad situation. If "only" one of two assets you own is affected, it is still bad, but not so bad as in the other example.

On the other hand, as was already mentioned by someone else, you either have to consult your partner on most decisions, or one of you gets the power of decisions and reports to the other part.

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  • +1 The benefit of diversification is an important factor. Not the only one, but an important one.
    – TripeHound
    Aug 27, 2019 at 6:51

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