Co-buying property.
Discussion
I have been looking at buying my first house recently with the intention of letting a room in it when I get it to ease the living costs. However I got talking to my housemate the other day who is in a similar position to myself and we started to question the idea of buying a place together. Benefits we can think of-
-Reducing mortgage payments (individually)
-Allows us to buy a decent place in a decent location (Yes I know it doesn't double our budget but adding the two deposits together and the additional lend on the mortgage should help)
-We don't need to let rooms out, and having lived in the same house for over a year we know each other already
Risks I can think of-
-One of us needs to move quickly for unforeseen circumstances (both settled in jobs and single at the moment) Thus requiring the place to be sold or have the mortgage increased heavily on that individual party to keep the place
I understand it is wise to have the split of asset and any other agreements documented by one parties solicitor and checked by the other, so when the place does come to be sold then there isn't any issue.
I guess it depends heavily on the two people buying the place but does anybody on here have any experience of the success/failure of people doing this? It would be great to hear any risks or benefits that I have missed above! Thanks.
-
-Reducing mortgage payments (individually)
-Allows us to buy a decent place in a decent location (Yes I know it doesn't double our budget but adding the two deposits together and the additional lend on the mortgage should help)
-We don't need to let rooms out, and having lived in the same house for over a year we know each other already
Risks I can think of-
-One of us needs to move quickly for unforeseen circumstances (both settled in jobs and single at the moment) Thus requiring the place to be sold or have the mortgage increased heavily on that individual party to keep the place
I understand it is wise to have the split of asset and any other agreements documented by one parties solicitor and checked by the other, so when the place does come to be sold then there isn't any issue.
I guess it depends heavily on the two people buying the place but does anybody on here have any experience of the success/failure of people doing this? It would be great to hear any risks or benefits that I have missed above! Thanks.
-
I did this with mate 16 years ago, and whilst it was the best 3 and a half years of my life, it was also the worst end.
We fell out when the time came to sell and it resulted in me basically forcing him to sell, he refused to take a penny less than the asking price, hence he ended up with considerably more than me to start again as I had to make up the shortfall on his side.
Funnily enough we met up again last weekend for a mutual friends stag do and all was well, but could have been tricky!
I`ve also owned and rented a room to mates, this is by far a much much better way of doing it.
Good luck whatever you decide to do
We fell out when the time came to sell and it resulted in me basically forcing him to sell, he refused to take a penny less than the asking price, hence he ended up with considerably more than me to start again as I had to make up the shortfall on his side.
Funnily enough we met up again last weekend for a mutual friends stag do and all was well, but could have been tricky!
I`ve also owned and rented a room to mates, this is by far a much much better way of doing it.
Good luck whatever you decide to do
The most important thing is to agree (before you buy) how you will handle an exit / eventual sale.
It seems very dull but you need to agree in writing what will happen if circumstances change and one of you wants to leave or sell the property. If you can agree and document a process now, you will be able to handle the inevitable, and with minimal strain on your friendship.
I made a mistake buying property with friends and although we discussed this, we didn't put this in writing, so its very difficult to act now and I'm lumbered with property that I can't turn back into cash!
It seems very dull but you need to agree in writing what will happen if circumstances change and one of you wants to leave or sell the property. If you can agree and document a process now, you will be able to handle the inevitable, and with minimal strain on your friendship.
I made a mistake buying property with friends and although we discussed this, we didn't put this in writing, so its very difficult to act now and I'm lumbered with property that I can't turn back into cash!
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