Real estate investment can be tricky for 2 main reasons; one, you need to have a lot of money to purchase a property and two, you're obligated to be buried in paperwork and other legal issues before you can actually purchase a property.
While there are real estate investors who work alone, there are others who go into a partnership to secure various properties. Determining the kind of property ownership is important because it comes with different legal responsibilities and obligations like bankruptcy and inheritability. If you're an aspiring real estate investor, here are some things you need to know about the different kinds of real estate ownership and how you can take advantage of them:
1.) Severality - Severality is a kind of ownership where the real estate property is controlled by one person or legal representative. Ownership in severality can provide the owner complete control of the land or property and can choose to do whatever he wants to (selling, leasing, etc) without the need for consultation of other parties.
2.) Co-owned properties - This is the opposite of ownership by severality; co-owned properties are comprised of two or more owners and they each share the same legal rights. There are different kinds of co-ownerships and these are just some of the following:
a. Tenancy in common provides owners with a certain fraction of interest of a property and is divided into equal shares. This kind of co-ownership lists all the owners on the property's title, including the amount of their ownership.
b. Joint tenancy is nearly similar to tenancy in common but with one difference: undivided interest among joint tenants is present and use of property is allowed but co-owners are not allowed to sell a piece of the property without consent from the other owners.
c. Tenancy by the entirety is similar to joint tenancy (undivided interests among tenants) but ownership is limited to two people only and they must be married.
Knowing the kinds of real estate ownership you are going into is important because it will affect you and your partners in the long run. Even if you have no plans of entering a partnership with other people, it's still important for you, as an investor, to know what you can expect from other forms of ownerships. This will allow you to come up with more effective marketing plans that can bolster your income.
