Rental Property?

May 19, 2007 by Johnny H | Posted in Renting & Real Estate

I just recently put a house I lived in the past four (4) years on the market as a rental property. In doing my homework, I understand the record keeping is essential and I plan to open a separate checking or savings account specifically for this rental property. Can anyone give me advice on how the account must be titled or is it really relevant. Is it acceptable to have the account entitled "My name - rental property"? Just curious. Thank you.

My husband and I took on the rental properties and it is also preparing houses in our spare time. We actually started an LLC to protect from lawsuits and others. We used our names.

What is a good formula for splitting profits on a rental property investment?

Aug 28, 2007 by Maika | Posted in Renting & Real Estate

I am involved in a 3-way investment on a rental property and we are forced to sell because of a DOT project. Our profit on this property will be approximately $ 75,000 and we need to understand how to divide it. As members of the immediate family, we were not too concerned given what we bought the property.

I really appreciate all the suggestions of experienced property investors with investment in partnerships of this kind.

Here are the figures for capital and labor / Mangement invested by each party.

Investor # 1:
$ 150 000 invested by purchasing a regular home loan.
Lived in the property and paid "rent".
Did 85% of the maintenance, improvement and management of rental property.

Investor # 2:
Invested $ 75,000 from a line of credit home equity.
Did 0% of the maintenance, improvement and management of rental property.

Investor # 3:
Invested $ 25,000 from a line of credit home equity.
Did 15% of the maintenance, improvement and management of rental property.

Thank you!

Given that investors # 1 rent paid and mostly kept the house, it would be distributed as follows
$ 250,000 purchase price, profit is 75000 (I assume you have already taken the maintenance of this)
Investor # 1 paid $ 150,000 / $ 250,000 = 60% $ 75,000 Profit = $ 45,000
Investor # 2 - paid $ 75,000 / $ 250,000 = 30% $ 75,000 = $ 22,500
Investor # 3 - paid $ 25,000 / $ 250,000 = 10% $ 75,000 = $ 7,500

If you have not taken maintenance, then you must deduct the cost of maintenance on the benefit and pay each of the parties to return to the conversation they have paid.Keep in mind that investor # 1, as lessee, would normally have to maintain the property but I am assuming that he did more than simply "maintaining" the property.

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