Interest rates are the lowest they have ever been, however, many people are still finding it challenging to purchase a property on their own, especially the younger generation. If you have a family member or friend looking to enter the property market or eager to climb up the property ladder, the solution could lie in buying property with family and friends or utilising current equity in the family home or investment.
While there is always the chance of unforeseen issues with those close to you, there are also many benefits from teaming up with your loved ones to acquire a new property.
There is a better chance of home loan approval – Having two or more people on the home loan application can facilitate the process and increase the chances of being approved as two incomes are generally better than one.
Split expenses – Buying a property with someone else means you’re splitting all the costs, making it easier and more affordable.
Unpredictable circumstances – A fall out with a family or friend is not uncommon, so it is important to remember to separate business from pleasure and not let personal issues get in the way of your property ties.
Selling – Unforeseen events can have you or the other party/s wanting to sell up. As the process of selling can often be complicated or a lengthy one, you need to make sure that you have a strong relationship with the person you are buying with.
When entering into any type of financial agreement with family or friends, it’s wise to get a co-ownership agreement drafted by your solicitor to avoid any disputes. This agreement will outline any obstacles you may face such as who chooses tenants, property managers or what happens when one of you decides to sell. [Refer to our Mar – Apr issue]
If you have a family member or friend that is looking to purchase a property we are here to assist and offer advice.