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There are multiple ways to hold a title on an investment property, and if you’re purchasing rental properties, it’s in your best interest to do your research and make an informed decision. Unfortunately, this topic is often overlooked and is widely misunderstood.
On today’s episode of Investing in Real Estate, Natali is sharing an important lesson she learned in real estate school about holding title. We’ll discuss our real life example, as well as some other interesting scenarios. We’ll discuss why this issue is so important, and how you can protect your ownership of real estate.
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A title is your claim to your property. When you purchase a piece of real estate, the title company will conduct a search to ensure you can obtain a clean title. This can be an incredibly important liability issue.
How the title is held in a partnership can also be imperative. When two partners go into a deal, they are often listed as tenants in common. In this scenario, each tenant has separate ownership—usually 50/50, but any proportion can be chosen. Each tenant in common can do whatever they wish with their portion, and if partner were to pass away, their portion will be passed to their right of survivorship.
Another strategy to consider is called joint tenancy. In this instance, the owners do not divide their right to survivorship. This is typically the best choice for a married couple. In the event that a joint tenant passes away, the surviving tenant then assumes full ownership.
On today’s show, we’ll run through these scenarios in-depth. We’ll talk about our personal experience, the pros and cons to each designation, and why you should talk to an attorney. This is an important topic to understand; you won’t want to miss episode 295 of Investing in Real Estate!
If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.
On this episode you'll learn:
- What is the importance of owning real estate in an LLC?
- What is fee simple?
- How can you conduct a 1031 exchange in a partnership?
- And much more!