Interest rates are the lowest they’ve ever been, but many people are still finding a challenge in purchasing a home on their own. If you’re 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.
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 home:
Pros
Better chance of home loan approval – Having two or more people on the home loan application can facilitate the process and increase your 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.
Cons
Unpredictable circumstances – A fall out with our family or friends is not uncommon, so it’s 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(ies) want to sell up. As the process of selling can often be a complicated or a lengthy one, make sure you have a strong relationship with the person you’re buying with.
When entering any type of financial agreement with family and friends, it’s wise to get a co-ownership agreement drafted by your solicitor to avoid things going pear-shaped. 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.
Ultimately, owning property with someone you know can be a great step to your financial future and help you get the property portfolio you want, sooner.
