Mortgage Question On Investment Property With Partner

[Gil Happy]

Hello,

I've a got quick question about possibly purchasing an investment vacation home (with the intention to rent it out as much as possible) with a partner / friend. My question is about the loan or mortgage - when people go into an agreement like this (assume they are splitting all costs equally), do both people obtain a mortgage for 50% of the property, or does one person get the loan in their name for the full amount and then just receives payment from the other party for all expenses, etc? However it is done, both of us would be on the title to the home.

Just to give you a quick background, I have been doing vacation rentals for a number of years by myself on 3 different properties that I currently own.  Also, the purchase price would be less than 150k.

Thanks in advance!

[Chris Mason]

Option 1: One mortgage, both on it, you're coborrowers, no different in terms of responsibility/obligations/etc than an engaged couple buying together.

Option 2: One mortgage, only one person on it, the other person can be property manager or whatever you work out once you own it.

Option 3: One person on mortgage, both on title. The person on title but not obligated to pay the mortgage is at an advantage relative to the other party, since they can stop the sale, rent, etc, but don't have to make any payments on it.