135

A good way to figure out what is fair in such a situation is to mentally separate the various roles, and to explore the rights and obligations of the roles first, and to then aggregate them. Here we have: You, the partial owner Your sister, the partial owner You, the property manager You, the renter The property owner is responsible for the taxes, upkeep, ...


51

The answer is actually somewhere between "yes" and "no". Think of it this way: if you didn't live in the house, then the house could be rented out, generating some rental income. Let's say, the house is rented out for $1000 per month. This means that both you and your sister (assuming equal share) get $500 per month. With you living in ...


27

It's tricky when multiple parties own a house, contribute to the upkeep unequally, and enjoy the benefits of owning the house unequally. I agree with both of you to some extent. She should get some consideration since you get all the benefit of living there, but you should get some consideration for paying the expenses/upkeep. Letting it fall to disrepair ...


18

It is helpful to imagine that you are two different people, one who is the half-owner of the house and one who is renting the house. Let's look first at you as the half-owner. You and your sister are each half-owners of a house that is being rented by someone. That means you each are entitled to half the rent but have to pay half the taxes, expenses and ...


12

The first and most important thing to consider is that this is a BUSINESS TRANSACTION, and needs to be treated as such. Nail down Absolutely All The Details, specifically including what happens if either of you decides it's time to move and wants to sell off your share of the property. Get at least one lawyer involved in drawing up that contract, perhaps two ...


12

Your lack of numbers makes the question a difficult read. What I'm hearing is "I want a house requiring a mortgage 8X my income." This alone is enough to suggest it's a bad deal. On a personal note, when my wife and I bought our house, it was 2.5X our income. 20% down, so the mortgage was exactly 2X income. And my wife was convinced we were in over our ...


11

Other answers are focusing on a theoretical historical business partnership wearing a "landlord hat", which is one possible way to construe the history since 2000, but that glosses over something: if you had a formal lease from a landlord, you would have formal rights to exclude your sister from use of the property since 2000. Whether the ...


10

this seems like a bad idea. Example: You want to sell. He doesn't. But he doesn't have enough money to buy you out. What will you do? You might want to sell because you need money, you have to move, you want to get married, you want to start a new business, etc. You two are not equals (you need a place to live), so this is unlikely to work.


10

they have a mortgage on it with a balance of $125,000. They took out $40,000 of their primary residence HELOC to remodel the cabin. Completely, utterly and truly... irrelevant. I would like to take $70,000 and invest in ownership of the cabin. All that matters when buying partial ownership of "something" is the current fair market value. Thus, if you ...


9

One way to look at it is to ask yourself what you would have to pay if you moved out and rented a house or apartment on your own. If the cost of doing that is comparable to the cost you pay by living in the house, it would seem that that is a reasonable price for that arrangement. In other words, consider the price of a substitutable good (namely, ...


8

Your argument hinges on the hypothetical: If we were not living here, taxes and insurance would still have to be paid. Your siblings could just as well argue that if you were not living in this house, you would have to buy a house of your own or rent an apartment. Therefore, in fairness you should pay rent to the other two siblings for the fair market value ...


7

Joint tenancy versus tenants in common is key here. If they are tenants in common (ie have a specific share each), it is theoretically possible but with emphasis on "theoretically": HOA Advice: Tenants in common don’t have to own equal shares of the property. They can each act individually, which means they can leave it to a beneficiary in their will. ...


7

This will be up to the bank. Ask them, but if they are unwilling then refinancing or selling the house are the only other options. Even changing the title does not release you from the loan obligation.


7

Sister is putting down nothing, and paying sub-market rent. It looks to me like if she is assigned anything, it's a gift. You on the other hand, have put down the full downpayment, and instead of breaking even via fair rent, are feeding the property to the tune of $645/mo. In the old days, the days of Robert Allen's "no money down" it was common to see ...


7

It can sometimes be difficult when four different people own one house, especially one that everyone is emotionally attached to. Offer to buy the house, or offer to pay rent. If you want to buy the house, you should be able to do that with a regular mortgage, just as if you were buying a stranger's house. Get an appraisal on the house, and offer a fair ...


7

You should value the unit at: The fair market value of the whole property in 1983 (or whenever 25 years ago was) minus what the eldest sibling paid for the whole property minus the expected value in 1983 of free rent to the parents for the rest of their lives, Then convert from 1983 dollars to 2018 dollars.


7

I think the best solution is to get a mortgage for half the home's value and pay your sister. I know you said that it was "out of the question", but you might want to discuss it as an option because you're about to enter into a possibly more unpleasant situation. I agree with the other answers that the fair thing to do is to pay your sister half ...


7

There's two sets of two sides to this. There's your side vs her side, and there's equitable vs legal solutions. I'm sure it seems like your sister is being unfair, or somehow greedy, but the reality is that she is 1/2 owner, and you have been getting free benefit at her expense for a long time. I want to say that clearly upfront because I'm sure this is ...


6

There is no 'right' answer, only a choice of ways to calculate and you'll all need to choose what's right for you. One way - You each own 1/3 (right?) and on sale the mortgage is paid off but you then get £10,000 plus accrued interest (at the same rate as the mortgage) off the top. This is the same as if you lent each sibling £3,333 at that rate. One ...


6

Summary: Depending on your legal status with your partner, you may or may not need to pay the 3% SDLT surcharge. HMRC clarified the situation via a series of examples. I believe either example 1 or 2 apply to your case: Example 1 Mr and Mrs S, a married couple, each own a residential property, with neither having any interest in the other’s property. They ...


6

Take the situation almost exactly as it is, except that it is me living in the house and renting it, not you. There would be an agreement between me, you and your sister how much rent I pay, and what other cost I would pay, like utility bills. You would take the rent, then you would have to pay for maintenance and everything else I don’t pay, and what ...


5

It may clarify your thinking if you look at this as two transactions: You and your friend forming a partnership to invest in a property, You leasing the property from the partnership. I am an Australian so I cannot comment on US tax laws but this is how the Australian Tax Office would view the transaction. By thinking this way you can allocate the risks ...


5

It may clarify your thinking if you look at this as two transactions: You, your husband and sister are forming a partnership to invest in a property, Your sister is leasing the property from the partnership. I am an Australian so I cannot comment on US tax laws but this is how the Australian Tax Office would view the transaction. By thinking this way you ...


5

Accounting for this properly is not a trivial matter, and you would be wise to pay a little extra to talk with a lawyer and/or CPA to ensure the precise wording. How best to structure such an arrangement will depend upon your particular jurisdiction, as this is not a federal matter - you need someone licensed to advise in your particular state at least. The ...


5

Before doing anything else: you want a lawyer involved right from the beginning, to make sure that something reasonable happens with the house if one of you dies or leaves. Seriously, you'll both be safer and happier if it's all explicit. How much you should put on the house is not the right question. Houses don't sell instantly, and while you can access ...


5

The percentage of ownership is whatever the partners decide. It is best to define what the initial partnership percentages are at the moment the property is purchased, and how it might change as the years go on. Your agreement will have to state what happens to the partnership if somebody dies, or if one person has to sell for any reason. Issues such as ...


4

The bottom line is that you can decide whatever you want to do. It is good of you to get everything in writing. What happens if she decides to move to a different city? What happens if she also wants to be bought out? It should also include contingencies for your husband and yourself. God forbid anything negative happens, but what happens if you two get ...


4

What money are you paying with for it? Texas is a community property State, and assets purchased with community money are community. Not writing her in the title may not change the fact that she still owns the house, just make everything much more complicated.


4

Both people are responsible for the loan, it doesn't matter who is prime. The lender can ding both parties credit reports for failure to pay. It can force payment from either party. They are unlikely to want to let one party out of the deal unless they have done an updated review of the solo persons finances and credit. Of course that type of review is ...


4

In the US, you'll have to report any profit on selling the house as income (capital gain). The house was not your residence, so gains on it are not excluded (part of gains on sale of primary residence is protected). If you have zero invested, and you're paid zero when you are removed from the mortgage, then there's no profit, no gain, and nothing to tax. ...


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