Interviewed on Triple J – Buying property with friends
Last week I was asked to appear on Triple J to discuss buying property with friends and family.
The interview starts at 18 minutes and some tips and points to consider are discussed. Below are a few tips from the interview:
- Have a Will so that in something happens, the property is inherited by who you want it to be
- Have a co-ownership agreement drawn up by a lawyer that spells out all the terms of how the property will be owned, managed and how all potential scenarios will be dealt with (i.e. what if one person wants to sell, how will tenants be selected)
- Try to purchase with people who are in a similar financial position to you (hopefully both in good positions)
- Discuss why you want to purchase the property together, how long you both intend to own the property for, and try to think about all things that may change in the future and discuss how they would be dealt with before the purchase is made
- Have appropriate insurances to protect against damage from tenants and secure your own income so repayments can be made even if you are sick for injured for an extended period of time
- Seek professional legal, financial and debt advice. There may be consequences of purchasing a property with friends that you have not considered. For example, your friends debt, not just your debt, will be taken into account if you want to purchase another property which may make it harder to buy further property.
- Try to have a sinking fund so that repairs and costs can be met without strain on your personal cash flow.