Investment Properties Can Be a Sticking Point

Even in amicable divorces, some issues can unexpectedly complicate the process. Investment properties are one such sticking point. While both parties may agree on most major decisions, real estate used to generate income can raise legal, financial, and emotional challenges that require careful planning and negotiation.

With the right guidance, even tricky issues like income-generating properties can be resolved in a way that supports your future. To learn more, connect with an Orlando family lawyer.

Why Do Investment Properties Complicate Divorce?

Investment properties are real estate holdings that are not used as a primary residence. They include rental homes, multi-unit buildings, commercial properties, and vacation homes that are rented out part-time or full-time. These assets often serve as long-term income sources or part of a couple’s retirement plan. Unlike the family home, which typically has emotional weight, investment properties are often tied more to financial goals.

In a collaborative divorce setting, both parties aim to reach agreements respectfully and outside of court. This process works well for many couples, but complications can still arise when investment properties are involved. Issues often include:

• Valuation disputes. Determining the fair market value of an investment property can be tricky, especially if it has appreciated in value or produces rental income. In many cases, an appraiser or real estate expert must be brought in.
• Income considerations. Investment properties generate ongoing income, so both parties may want to retain these valuable assets. Determining how to divide current and future income fairly can become complex.
• Maintenance and management. One spouse may not want the responsibility of managing tenants, maintenance, and property taxes, especially if they were not involved in the property’s operations during the marriage.
• Tax implications. Selling or transferring ownership of investment properties can trigger capital gains taxes or alter depreciation schedules, affecting both parties’ financial positions.

It doesn’t matter if the investment properties are located in Florida or in another state. If the couple acquired the property during the marriage using marital funds, it is typically considered a marital asset subject to equitable distribution under Florida law. That said, out-of-state properties can add logistical challenges. Different tax laws, property regulations, and legal procedures may apply, and a Florida court may not have direct authority over how those properties are ultimately handled.

Who Keeps the Property?

Deciding who retains an investment property during divorce depends on several factors. Each spouse’s financial situation and who managed the property during the marriage will be considered. Additionally, whether one spouse is willing and able to buy out the other’s share will be reviewed. Sometimes, an Orlando family lawyer can help you design a creative solution, such as one spouse keeping the property while the other receives a different asset of similar value.

Could you use legal advice when it comes to divorce and investment properties? When multiple properties are involved, work with the family law attorneys at Donna Hung Law, legal professionals who understand the real estate aspects of property division and divorce. Call 407-999-0099 or contact the office online.