Avoid the big break-up
The price of property has made the dream of owning a home inaccessible for many people. But a new study has found that 31% of Australians would consider co-buying property with a friend or relative.
Although co-ownership is an extremely viable option, and makes purchasing property more accessible to a significantly higher number of people, like any investment strategy it’s crucial to understand all the factors involved.
Here are ways to ensure the safety of both parties and avoid the ultimate co-ownership break-up:
1 Due diligence
You must always know where you stand. Be involved in all bank and loan meetings, and in legal agreements throughout the co-ownership process.
Doing anything with another person means that you may need to be flexible at times. This may be on location, size or budget. Know what you want but make sure you accommodate your friend’s needs/wants too. It’s a partnership, after all.
3 Manage expectations
It’s key to have your expectations about each person’s role and responsibilities outlined in a legal document to ensure that everyone’s concerns are met. This will sidestep any possible disagreements.
4 Have a co-ownership agreement
While it’s important to have trust and verbal agreement, a co-ownership agreement should help avoid the risk this poses. Keep you and your friends safe by having this legal document in place.
5 Have an exit plan
Circumstances change, and it’s crucial for both parties to be able to exit the agreement at any given time. Having this in your agreement, you’ll have peace of mind that each party will be safe if the time to part comes.