Sibling Partnership Strategy

[Michael Sawers]

I’m the older brother planning on paying all up front costs. My younger brother, new to his career with little capital, will be living in the house, paying rent, and acting as the landlord. I want to keep the agreement between us professional. I want to treat him as a tenant, property manager, AND a partner. I will pay him the property management fee along with a portion of the profit from rent. He will also be responsible for the market value of rent as the tenant. What I’m trying to find out is what percentage of the house should he own if he put nothing down. I want to make this purely business and fair for both of us.

[Omar Khan]

@Michael Sawers This can become a touchy topic. To retain overall control, you should ensure that your name is on the title. There is no rule of thumb as @Dave Van Horn has mentioned but tread carefully. 

What are the terms and how long do you expect your brother to be the acting landlord? Have everything written down upfront to avoid confusions. Different people remember different aspects of conversations. 

Best of luck!