Joint Property Ownership
Buying investment property can be a daunting task. Lately many people have been easing the burden of sole ownership by going in with their friends or family to own their first investment property. This type of agreement is known as Tenants in Common. You may have also heard of Joint Tenancy, that arrangement is typically only for married couples.
While buying investment property with friends can be an easier way to start owning property earlier, it's not without its own dangers.
Dangers of Investing with Friends & Family
Before you enter in to an agreement to co-own an investment property like a new 2 bedroom apartment you should be aware of some of the possible dangers of doing business with your friends or family.
- What if you have a falling out with your best mate?
- What if your family member gets married & decides they want to sell in order to buy a property with their new partner
- What if your family member dies? Who inherits their share?
How to Avoid the Dangers
You and your mate have decided that you want to go in together and co-own a new property to live in or let. Now, how do you avoid the traps that so many other people have fallen in to?
First, you need to treat this like a serious business. Find out what they expect out of it. If your expectations don't line up then you should stop right away because it will end in tears.
Get legal advice. Get a will. Go over every contingency and get a binding co-ownership agreement drawn up.
- If they die what happens to their share?
- Will the shares be 50/50 or 20/80?
- How long should the arrangement be for? 5 years? 10?
- What is the exit strategy?
- What happens if one person wants to sell and the other doesn?
You must put everything in writing to avoid any problems that could arise. As long as everyone is on the same page then you have a great chance of a successful partnership which could yield an excellent return on your investment property.
If you'd like to invest in the Milton Residences you can register your interest online.