What you need to know before investing with someone else.
By | 15th Nov 16

What you need to know before investing with someone else.

The booming housing market has provided a lot of commentary about “The Great Australian Dream” and whether owning your own home is something that the future generation will enjoy. With this in mind, many people are choosing to get their foot on the property ladder by co-investing with family or friends. We’ve complied some tips to ensure you’ve got your head and heart set on a fruitful investment.

  • Consider and understand liability – Buying with someone else may mean you can afford to purchase property, but did you know when you sign a mortgage with someone else, you are both liable for the full loan amount and not just the half or percentage you contribute to the purchase. This means if your joint-venture partner can no longer service the loan, you will be liable for the full amount regardless of how much you contributed.
  • Speak to your accountant, mortgage broker and lawyer – Many people forget to seek advice from either their accountant, mortgage broker or lawyer. Sound advice on how to structure your loan can save you a lot financially or your relationship with your joint venture partner.
  • Have an exit strategy – It doesn’t matter if your purchase is an investment or one you would like to live in, you need to ensure you have an exit strategy in the case your co-investor wants to sell. It allows you to be realistic and access your options before you sign on the dotted line.
  • Draw up a separate contract –You may be investing with your sister or a friend. Let’s face it, you don’t want to ruin a perfectly good relationship! Consider speaking to your lawyer about a separate contract between the two parties.
  • Be honest with each other – Purchasing an investment is a huge step. It’s important as part of your due diligence process to be totally honest with each other. This will assist you in ensuring the property you buy fits both your financial goals.

We always wish our Advantage family the best with investing. It can be a life changing experience, and done right can be fruitful for everyone. If you’d like to see how you can invest in the property market, get in touch for your first free, no obligation consultation by emailing us : buyer@advantageproperty.com.au