- Understand the shared financial commitment
Buying a property is a big financial commitment, not only because of the ongoing monthly repayments, but also the responsibility for the regular expenses involved in running and maintaining the property. A decision should not be based in emotion but in cold hard numbers. Don’t let your desire to ‘help’ a friend cloud your judgement, only commit what you can afford.
- Be honest
Being as honest and open as possible about each of your own expenses, spending, savings and debts is crucial. You both need a true picture of each of your financial strengths and weaknesses. Discuss what your current budgets are and how they will have to change to manage the new expenses you will both be committing to
- Decide on clear terms of co-ownership
There are a couple of options to choose from in terms of the ownership structure. ‘Tenants in Common’ gives each party a share in the ownership of the property, while ‘Joint Tenants’ means the two of you together own the property as one entity, without individual shares or rights of ownership. We would suggest you speak to a lawyer to decide what is best.
- Task agreement
You are joint owners, so it is important each party is contributing fairly. Ensure your co-ownership agreement covers points such as division of expenses (like cleaning and maintenance of the property, rates, utilities etc.), division tasks like who will take care of the garden, who co-ordinates tradespeople, who organising the regular maintenance, etc. All of these ‘jobs’ need to be considered and allocated in advance to avoid confusions and resentment in the future.
If you have any further questions or queries about buying and selling property, get in touch – love to hear from you!
Have a great week.