There are so many questions one has to answer for him/herself before becoming a real estate investor. And most of them have no right answer. Well, here is a slightly more unusual question that you might want to consider if you are married and are thinking of starting a real estate investing business: Is it a good idea to work with your spouse in real estate investing? Once again, there is no obvious, straightforward response, but there are many aspects of this thought that you should consider before deciding either way.
Let’s take a look at the pros and cons of working with your spouse in real estate investing:
The Advantages of Working With Your Spouse in Real Estate Investing
1. Pulling your common money together
When working with your spouse in real estate investing, there is nothing that prevents you from investing all your available money (as long as you have strong reasons to believe you will be successful real estate investors) in buying an investment property. This means that you can buy a larger (maybe a multi-family property) or more luxurious income property or even two rental properties, which will bring you more rental income than what you would be able to afford with half the family savings. So a real estate partnership with your spouse is very much likely to increase your rental income.
2. Having the same goals
After all, we are talking about working together with the person with whom you chose to spend the rest of your life. This means that you should already be having the same goals, especially when it comes to providing income for your family. Unlike in other real estate partnerships, where one partner might be after riskier quick profit, while the other partner might be looking forward to safer, larger profit in the long term when working with your spouse in real estate investing, you are likely to have the same life goals. Whether it is that you need some money in a couple of years to buy a home or you would like to save up for your children’s college, you and your spouse probably aim for the same thing.
Related: What You Need to Know about Real Estate Partnerships
3. No incentive to cheat
Real estate partnerships can be quite tricky because there is always the risk that your partner might decide to cheat in order to get more money than what he/she deserves. Well, when working with your spouse in real estate investing, you should not have this problem because any money made goes towards the family budget, so neither you nor your spouse should feel the urge to cheat in the business.
4. No legal complications
While common ownership of an investment property by a few unrelated partners might cause significant legal and tax complications, you will not have this problem if you are working with your spouse in real estate investing. After all, it is not so different from buying a home.
Related: 5 Legal Real Estate Investing Tips To Know Before Buying A Property
5. Different backgrounds
Most people tend to marry someone with an educational and professional background very different from their own. This means that if you go for working with your spouse in real estate investing, you two are likely to bring different – and hopefully complementary – experiences, expertise, and even personalities to your common real estate investing business. In this sense, it is better to buy and manage a rental property with your spouse rather than on your own.
6. A sense of doing something together
Sometimes spouses just don’t have the opportunity to be together and spend time with each other. This is even more likely to be the case in case one of the two decides to go for real estate investing in addition to his/her 9-to-5 job. Thus, it might actually be a good idea to work with your spouse in real estate investing as this will give you the chance to spend more time together, doing something that’s good for the whole family.
Having said all that, however, it is not all roses when it comes to working with your spouse in real estate investing. Let’s look at some of the cons:
The Disadvantages of Working With Your Spouse in Real Estate Investing
1. Riskier investments
Speaking from a purely financial point of view, it might not be a very good idea working with your spouse in real estate investing because if you invest all your family savings in buying a rental property and your business fails for whatever reason, you might lose all your money. So be careful with how much you invest if you opt for this choice.
2. Controlling personalities
Maybe either you or your spouse tends to have a controlling personality, feeling the need to always have the final say. Well, if this is the case in your personal relationship at home, keep in mind that this dynamic will also be transferred to your professional relations in your common real estate investing business. While you might be used to your spouse’s attempts to control the household, you might not be able to tolerate the same experience in your business.
3. Mixing up your relationship and your business
Related to #2 above, this is a problem which could arise from forming a real estate partnership with any friend or acquaintance, not only your spouse. When working with your spouse in real estate investing, it will be hard to keep your personal relationship and your business relationship separate. Any tensions arising in one arena will automatically be transferred to the other. That’s the human nature playing role in real estate investing.
4. Blaming each other for failures
If things don’t go so well in your common real estate business, you and your spouse will start blaming each other for any small problem, regardless of whose fault it is or whether it’s something that could just not be avoided. In this way, you will risk destroying your marriage in addition to your business.
5. Seeing “too much” of each other
You know how we said above that nowadays spouses tend to not have enough time for each other. Well, having too much time with one another is the other side of the same problem. If you spend your time at work with your spouse as well as your time at home, it might just become too much of this person, regardless of how much you love him/her.
6. Having no time for the kids
If you or your spouse becomes a real estate investor, this will definitely affect your schedule, the time you have for each other, and the time you or your spouse have for your kids. Now imagine what will happen if you start working with your spouse in real estate investing. Well, a very likely outcome is having no time to spare for your children, so beware.
While there is no right answer to whether you should be working with your spouse in real estate investing, it’s definitely an idea that’s worth some pondering. After all, it depends on you and your spouse and on the relationship between the two of you. Whether you decide to go for real estate investing on your own or with your life partner, don’t forget to use Mashvisor for your search through thousands of available real estate investment properties across the US.