Garfield, NJ · Member since 2017 · 1 post · 0 votes
I own 25% of a 3 apartment house, the other 75% is equally owned by three of my relatives (4 of us each own 25%). The house is fully paid for and currently is fully rented out (none of my relatives live there). The thing is, now I would like to live in one of the apartments but I can't figure out what would be my fair share of the rent.
Currently the rents total $3,500 a month. The apartment I would want is $900. The property taxes are about $10,500 annually. What would be fair for everyone involved?
Me not paying any rent, but the first two apartments being split 3 ways, I stead of 4? So for my living there rent-free, my portion of the $2,600 rent ($650) would be equally divided by my 3 relatives. Would that be fair?
Or would "fair" be me adding a little into the kitty? Like them taking my $650 cut and me also paying 1/4th of the property taxes? So somewhere in the $200-250 each month?
Just trying to figure out something fair for me and also the other 3 owners.
Investor · United States · Member since 2015 · 415 posts · 487 votes
9y
Rent the apartment at market rate as if you were any other tenant. And then you still pay your 25% share of ownership costs, and take 25% of the profits.
It's the only way to do it that treats everyone fairly.
Real Estate Investor · Austin, TX · Member since 2015 · 65 posts · 50 votes
9y
I wouldn't do it because it's too much complications considering profits/loss allocations, depreciation and tax implications. Talk to your tax advisor.