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Best way to go halves on a property?

Discussion in 'Property Finance' started by ej89, 2nd Sep, 2015.

  1. ej89

    ej89 Well-Known Member

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    Hey guys,
    What's the best way to go halves on a property? Looking to purchase something with my parents in Brisbane. Looking at buying something for 420-450k closer in. Already have a few suburbs mapped out..

    How will going halves affect my borrowing capacity and what can we set up for it not to affect us each as much?
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    Will affect borrowing capacity lots - you'll be able to declare half the income but have to declare the whole debt. I'd avoid it. Perhaps have them lend you money and you investor yourself (or vice versa)
     
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  3. ej89

    ej89 Well-Known Member

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    Any way to set up a trust or something to help?
     
  4. tobe

    tobe Well-Known Member

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    Best way? Get them to borrow from their house half the amount needed and gift it to you. Have the house and the loan against it in your name only. Have a legal agreement as to exit plans etc.
     
  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Need to understand why you want to purchase jointly. There might be better solutions.

    In general terms, unless you want to be financially joined at the hip forever, avoid this.

    If you bought in a trust, it might be possible to avoid the 50% income, 100% liability problem as long as you avoid doing anything else with that trust.
     
  6. kamchatsky

    kamchatsky Well-Known Member

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    Get married if not related?
     
  7. D.T.

    D.T. Adelaide Property Manager Business Member

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    To his parents? :eek:
     
  8. kamchatsky

    kamchatsky Well-Known Member

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    Well ej89 has to find another partner to go halves then! :D
     
  9. ej89

    ej89 Well-Known Member

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    What the hell's wrong with you lol
     
  10. ej89

    ej89 Well-Known Member

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    They're selling their place, but this does sound decent.

    If one property was purchased in a trust how would a bank assess me regarding that property? Will it definitely get rid of the 50% income, 100% liability? What type of trust? and what are the costs?

    I was initially going to do a family pledge..then we decided we're selling..then I was going to buy something under 200k, but didn't have enough cash.. So mum had the thought of maybe buying a place for 400k or so with decent yield to cover the costs, and on paper go 50/50 even though i'd be going more like 25/75.

    It was just a thought that she had to get us both into the Brisbane market together so now I'm researching the consequences of it.
     
  11. kamchatsky

    kamchatsky Well-Known Member

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    In seriousness I would avoid going halves unless it is with your spouse. It would just cause frictions when one-party needs to sell and then you spend time arguing about the price.

    I don't know about Trusts so I'll let the experts talk on this.
     
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  12. See Change

    See Change Timing Lord Premium Member

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    Best way to go halves in a property is to buy both halves ...

    Otherwise a recipie for disaster

    Cliff
     
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  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    @ej89 I've sent you some thoughts on how to a trust might be able to help for this type of purchase.

    Ultimately though the best way to buy property is just between you and your partner. The lending issues can be dealt with or somewhat mitigated, but there's so many personal consequences that make joint ownership with extended parties simply not worthwhile.
     
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  14. ej89

    ej89 Well-Known Member

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    haha gold. Thanks guys. @Peter_Tersteeg just seen the message :)
     
  15. albanga

    albanga Well-Known Member

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    I touched on this in a previous post but buying together is not always doom and gloom so long as you have an exit strategy. If you plan to hold then yes I would also discourage this.

    I purchaed with my brother in January 2012 for 610 and have gone on to subdivide the property. Just got the seperate lots valued at 910k. We are exiting the deal at the end of this year hopefully for even more than the Val.

    Minus holding costs (bare minimal as we lived in it) and subdivison/reno costs and your talking around a 250k net profit in 3 years.

    Sure there has been some angst, frustration and stress but I started with contributing 17k and will now all things going well will have made a significant leap forward in my financial future. Without this partnership I would have had no chance.
     
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