Would you consider buying a place with a friend, flatmate or family member? It’s an intriguing prospect but one that’s fraught with all sorts of pitfalls. The following is a press release from a website called Kohab.com. We publish it for no better reason than it offers another alternative in a challenging landscape.
Property prices and their general inaccessibility are ongoing issues for many Australians. As such, millennials are turning to alternative methods to gain their first step onto the property ladder. One emerging trend enabling their dream is property co-ownership with friends and family. In fact, 31% of Australians surveyed said that they would consider co-buying property with a friend or relative.
Current flatmates or friends are the perfect partners for co-ownership and an ideal scenario for this latest development in property. By combining buying power, the parties involved can halve their deposit and mortgage repayments, or cut their deposit to 33% if they buy with two others.
However, as with any big decision, it’s crucial to understand all the factors involved in co-ownership, as well as considering your co-buyers’ needs to ensure the relationship doesn’t go sour.
David Dawson, CEO and co-founder of Kohab, and expert on property co-ownership says, “Co-buying property with a friend is a smart idea in the current climate. Despite the close bond between friends, it’s important to have a legal co-ownership agreement drawn up to ensure the safety of both parties and avoid any major fallouts.”
David’s tips for friends considering the co-ownership option include:
- Know your expectations. It’s crucial to know each person’s role and responsibilities before entering into a co-ownership agreement. It’s key to always have your expectations outlined in a legal document to ensure that each party’s concerns are met in order to sidestep any disagreements that could arise.
- Have a co-ownership agreement in place. While it’s important to have trust, a co-ownership agreement exists so that you don’t need trust (per se). Too many co-ownership arrangements are based on trust alone and verbal agreement which is an avoidable risk. Keep you and you friends safe by having this legal document in place.
- Compromise. Doing anything with another person means that you may need to compromise at times. This may be on location, size or budget. Know what you want but make sure you accommodate your friend’s needs/wants also. This is a partnership after all.
- Make sure you have an exit plan. Circumstances change, and as such it’s crucial for both parties to be able to exit the agreement at any given time. By having this drawn up in your co-ownership agreement, you’ll have peace of mind that each party will be safe if the time comes for you to part ways.
- Do your due diligence. It’s imperative that you know where you stand at all times. Be involved in all bank meetings, loan conversations and legal agreements to ensure you are across everything throughout the co-ownership process.
For further information, you can visit Kohab.com a digital platform and market place for co-ownership.