Co-ownership is one way to get a leg up on the property ladder - but tread carefully. Andrew Winter fills you in on the legal complications, before jumping in.
The average age of the first time homebuyer in Australia is early to mid 30s, depending on where you live. And that's if you can afford to buy at all. For some people it can't seem possible.
The high costs of home ownership are forcing would-be buyers to get creative.
An increasingly popular solution is to join forces with a family member or friend. It seems like the perfect solution - there's potentially double the deposit and double the income to secure the loan on.
But as with everything - with the upsides comes some pretty hefty downsides. What if one of you wants to sell before the other? What if your partner can't meet their financial commitments....what if one of you loses your job? What if? The list goes on....
It's not all bad news though - there are some ways to avoid property partnership hell.
Know from the outset what each of you wants. Do either of you plan on living in the property?
How long do you plan to keep it? Be honest and realistic about your expectations. It's always a good idea to have a worst case scenario attitude when you're doing this.
A few dollars on a legal agreement now may save you a small fortune in the future. It doesn't have to be complex, but a co-ownership agreement can set out roles and responsibilities and clarify issues up front before they become a problem.
Be sure about your partner's financial solution. It circumstances change and one of you has to sell, this could lead to a legal and costly disagreement.
Make sure you have an exit strategy. It's also a good idea to factor in any maintenance on the property.
At some point there will certainly be some fixing, so think ahead about how you are going to fund this.