"The co-administrator must be either a Microsoft Account or a user account homed in the Default directory" message when you try to add a co-administrator for your Azure subscription

To resolve this issue, use one of the following methods.

Method 1: Add a Microsoft account

Add a Microsoft account as the co-admin.

Method 2: Change your default directory

If you want to use one of the organizational accounts, the directory where this organizational account is homed must be the default directory. To change your default directory, follow these steps:

1. Sign in to the Azure portal with the Azure Account Administrator.
2. In the navigation pane, click Settings, and then click Subscriptions.
3. Select the subscription that you want the co-admin to administer, and then click Edit Directory.
4. In the Edit Directory dialog box, select the Directory list, and then change the directory to the directory where the organizational account is homed. To do this, follow these steps.
   
   Note The Edit Directory dialog box is available only if the account is a Microsoft account. Organizational accounts can’t change the directory. Therefore, the directory can’t be deleted.
   1. On the Subscriptions page, notice the following information:
      • Subscription
      • Account administrator
      • Directory
   2. Have the Account Administrator sign in and change the default directory that is associated with the subscription.
5. Add the organizational account as the co-admin.