Topic of Partial Interest in Real Estate:

There are three owners (non related tenants in common) who live in a single family residential (SFR) home. Each owns a one third undivided interest in the property and each has to pay one third of the annual expenses (insurance=$600, property taxes=$3,000, utilities (water/sewer, gas, electric, trash)=$3,600. and maintenance =$1,500). The home has three bedrooms and one bathroom.Each owner occupies one of the bedrooms (all equivalent).The home has been valued at $600,000 and is owned free and clear.The house could rent for about $3,000/Mo.One of the owners wants to sell their one third interest (needs money).Neither of the other two owners want to buy this one third interest.

What do you think is the market value of the one third interest?

Please explain how you came up with your answer.

Can you find some comparable sales of one third or one half interest?

How about getting a mortgage for the one third interest?

You may want to think out of the box.You will not find this one in the textbook.