Avoid the big break-up

Money Magazine Australia - - MY MONEY | IN BRIEF - CEO and co-founder of Ko­hab

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.

2 Com­pro­mise

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.

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