Entering into a contract or agreement that requires a significant monetary investment can be intimidating. Most people find it easier to make big investments when their money isn’t the only money on the line. That’s why co-owning can be a great option for a variety of assets from real estate property to businesses. This article will look at a few assets you can co-own and why you might want to consider that route.
1. A Vacation Home
How many times have you dreamed of owning a vacation home but never followed through? If the cost of real estate ownership has caused you to balk in the past, consider co-owning. There are various types of co-ownership agreements you can enter into depending on your budget and preferences.
Some types of co-ownership give you joint possession with the other co-owners. In this situation, both you and the other co-owners legally and equally own the property. The deed or title to the property may list all of the owners as co-owners. Other co-owner arrangements may divide the property up in unequal percentages. In this type of arrangement, the primary owner pays more than those who own less of the property.
The benefits of co-owning a vacation home include sharing the costs of the property and its upkeep. Most often, people who co-own a vacation home know each other well and trust each other. Trust is important when co-owning a property because all parties have shared responsibility for any damage. If one person is reckless and destructive, it impacts the shared experience and investment of everyone else. For this reason and others, most people will only co-own a vacation home with family members or close friends.
2. A Business
Co-ownership of a business may be beneficial in some situations, though there are some drawbacks. Be careful not to confuse co-ownership with partnership, as these are two different arrangements. To be a co-owner, you must own stock certificates issued by the company. Co-ownerships do not have limitations regarding the number of members or shares allowed, but partnerships do.
When you co-own a business, you share the assets and risks. You also share the responsibility for running the business, which can reduce your stress. However, co-owning a business comes with its own challenges and risks as well. For example, you may not agree with the other co-owners on how the business should be run, which can lead to arguments. It can also be exceptionally challenging to buy out a co-owner if they don’t want to sell their share.
Whether you are a co-owner or partner will influence how personally liable you are for business debts. It will also determine how you’re taxed on the business income and how much control you have over the enterprise. Familiarize yourself with the benefits and drawbacks of co-ownership vs. partnership so you can make the best business decision.
3. A Car
Many people dream of owning exotic cars but are never able to save enough to turn their dreams into reality. If you don’t have the funds to buy an exotic car, co-ownership may be a possible solution. You can co-own a car with a sibling, parent, neighbor, or friend. It’s also possible to co-own one with a stranger, though that may not be the wisest decision.
Another common reason to co-own a car is to help someone else who can’t afford to purchase one. For example, parents will often co-own and co-sign on their child’s first vehicle. This arrangement divides the ownership and financial responsibility of the vehicle between the two parties.
To avoid ugly situations down the road, it’s wise to have a contract between the vehicle co-owners. The contract should define owner percentages of the car and specify how its use should be divided between the parties. It should also make the responsibilities of co-ownership clear to avoid future disputes.
4. A Boat
Owning a boat can be a lot of fun and can add excitement and interest to your vacations. But it’s also a significant investment that may be hard to justify if you’re shouldering the full cost by yourself. That’s why many families, friends, and even strangers decide to co-own a boat and share its use. Generally, it’s easier and safer to co-own a boat with someone you know and trust.
The benefits of co-owning a boat are similar to the benefits of co-owning any other large asset. You get to share the costs of ownership and upkeep with someone else. This arrangement makes it possible for those who can’t afford a boat to enjoy the pleasures of boat ownership.
When you co-own a boat, it’s important to remember that you’re not the only owner. To make sure all parties get equal and fair use to the boat, use a calendar. That way you can make sure all co-owners get an equal opportunity to enjoy the boat during peak boating season. You should also have co-owners keep records of expenses related to the boat so all costs can be shared.
For many individuals and families, co-ownership can make it possible to acquire assets they wouldn’t otherwise be able to acquire. Whether you have always wanted a vacation home or a boat, becoming a co-owner can turn your dreams into reality. Spend some time researching contracts and co-ownership dealings to determine what arrangement is best for you.