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Valuing investment real estate can be complicated

| Jan 2, 2020 | Divorce Disputes |

As most Californians know, real estate throughout California, and especially in San Jose and other parts of the Bay Area, is a hot commodity. Re-sale values of houses usually come in far above the purchase price, and the high demand for rentals mean that landlords can command top dollar.

In short, real estate is a good investment all along the West Coast, such that a couple may have most of their wealth tied up in property.

In the event of a divorce or legal separation, it can be hard to divvy up real estate. Even for the family home, a disagreement over the re-sale value or what the couple should do with the home can lead to a divorce dispute which litigators may have to resolve through a court hearing or through tough negotiations.

The problem of valuing real estate is even more pronounced, and complex, when the couple considering divorce or separation owns rental properties or other investment real estate. The reason is that, unlike residential property, re-sale value on the open market is not the primary consideration.

Indeed, those trying to evaluate investment property must also examine the property’s income potential, as it is often the case that holding on to a property so as to collect rent is a better financial strategy than is selling the property. Furthermore, commercial real estate is often relatively unique, meaning it is not as easy to value by comparing it to similar properties.

Putting the right value on marital property is a very important process in a California divorce or legal separation, especially when it comes to big ticket items like real estate. Having the help of an experienced family law litigation attorney may be important to those San Jose residents who are having property valuation issues.