As kids, we were taught the value of sharing. We were taught to share food, toys, and even our rooms! But as we grow older, our things become more expensive and valuable. Nevertheless, we still value sharing.
These days, with price hikes and everything, we recognize that property sharing may actually be an opportunity for everyone to reduce costs. Many people have adapted to that kind of set-up. However, if you own a tangible asset, like a house or car, then it’s best to understand who owns it. But why? Well, being clear with the ownership will determine how to resolve issues that may arise in the future.
Identifying Ownership of a Shared Property
There are two choices for you to make when it comes to owning a shared property.
The first one is through direct ownership. With this kind of ownership, all members of the group can own the shared items directly in any combination they prefer. Small groups would usually choose direct ownership because of its simplicity.
Indirect ownership allows your group to create a separate entity, like a nonprofit organization, and own a shared property. This then creates opportunities and advantages for large groups.
In this article, we will be discussing more about direct ownership as this is the most common arrangement among groups and investors.
Direct Ownership Arrangement for Shared Property
There are tons of ways to share ownership. To elaborate, for example, Nathan, Emily, and Letty decided that they want to share a set of hardware tools. So, here are some ways of ownership possibilities.
Sole Ownership
Nathan completely owns the hardware tools and occasionally, he allows the others to use them.
Fractional share of the property
With this kind of set-up, Nathan, Emily, and Letty can each own one-third of the tools. Their share can be divided equally or unequally depending on how much they’ve invested in the toolset. Fractional shares may be a good option if everyone in the group decides to chip in to buy the property. Plus this type of ownership is suitable for properties that are not divided easily.
Divisible part of the property
In this type of shared property ownership, each individual owns a specific tool in the set. However, all of them can use the entire set. So for example, Nathan owns the saw, Emily owns the drill, and Letty owns the screwdriver. It’s a good way to identify ownership if each person brings in his/her own property to the entire share. As such, members of the group would continue to own the property they contributed to the share and take it with them once they leave.
Joint tenancy
To ensure the continuity of owning the shared property among the group, joint tenancy may be the solution. What happens with this kind of set-up is that when one owner dies, the other owner automatically acquires the property. This then spares everyone from the trouble of having to divide or sell the shared property.
Final Thoughts
When making a real estate investment, it’s important to think ahead. Questions like “what’s in it for me?” and “how do I get an ROI?” would come to your mind and it’s only natural. After all, it’s your resources that you’re putting on the line.
So, in terms of property sharing, knowing the right property and having a trusted real estate company or agent is the best option there is. MTLOA Investments is here to guide you all throughout the process. You won’t be kept in the dark and you’ll have complete information as to where your investment is going.
For more details, you can visit us at mtloa.com.
