It's A Bad Idea
Robert asks if it’s all right to let a renter in his house be added to his house deed as a co-owner to lower his property taxes. Dave tells him why he got bad advice.
QUESTION: Robert in South Carolina asks if it’s all right to let a renter in his house be added to his house deed as a co-owner to lower his property taxes. He heard that he can just take the person’s name off the property if it doesn’t work out, but Dave tells him why he got bad advice.
ANSWER: You can’t just take people off of a deed. Once you give them property, they have to give you the property back. He would have to sign the deed back to you if you didn’t pay, which he’s not likely to do if he doesn’t pay. When you sign over like that, you now have a partner in real estate. The only way to get rid of them is if they want to leave, or you have to take them to court to disband the partnership. Very, very bad idea.
You can’t put him on the mortgage unless he qualifies for the mortgage. And if he’s not on the mortgage, he’s not liable. Only you are liable. The deed to the house is only how you own it. The mortgage is a separate document.
Lease the property to him and give him the option to buy the property at any time as long as the lease is being paid. If the lease is in default, the option is void.