Buying an apartment with my dad

Hi folks!

I used to enjoy reading the somersoft forums back in the day

Can anyone please suggest how I should approach this situation?

My dad is 60 and needs a place of his own.
If I help him buy a place he has a lot more options and I will inherit the property one day.
We are looking at buying an appartment for about $300k.
He would pay cash for half of it, and I'd get a loan for the rest.
He'd live in the apartment rent free, so I'd not be getting any income to service the loan, but I'd be getting an apartment for half price!

Should I just get a variable rate loan and make sure I can afford it, or is there more to it?

 

There are a few questions to ask yourself in my opinion.
1. Can you afford the repayments without the rent? Does the bank think you can service the loan without rent? (based on their calculators).
2. Will the property be in both names or just yours?
3. How will this move affect your future plans? That is - do you/will you want your own property in the future? If so, you need to think about how this will affect that. Will you able to service both properties?
4. In the event that you have a falling out with him, what will happen to the property?
5. Do you have any other siblings that may get involved later on to claim a piece of the pie? (assuming it's in both names).

Most of the time buying property with family can be the wrong move. I understand that this may be a sensitive situation and you're trying to help him. But I think you should get proper advice from a legal professional and a broker to have a crystal clear idea of what's involved so it runs as smoothly as possible and there are no issues which might arise later on.

Just a few things to think about.

 

What if he gets a younger woman pregnant with a new heir and you stuff up somewhere along the line? THEN WHAT??

 

Or he dies
Or you die
Or you marry a grub who makes a family law claim

Get legal advice to protect both of you

 

That sounds a bit harsh.
Marg

 

If your going to do it and can service.. I would take the 150 pay 20% deposit and legal cost, and offset the rest and put in your own name. Why in your name is because your going to have the mortgage and be responsible for the term of the loan.

 

Of course no rental income

 

Any siblings? Or your dad might find a partner potentially?

Fairly risky - it would be well worth looking at alternative options. Your father could potentially loan you the 50% portion, so you maintain 100% ownership and he retains his entitlement to the cash - but you'll still need to consider tax and pension treatment over the long term.

 

Many ways to structure this
Joint Tenants
Tenants in Common
Your name only
his name only
etc

Which you choose will depend on the circumstances. Too many variables to consider. Having 2 people involved means that number of things that can go wrong are quadrupled!

 

Asset in your name and then granting your father a life tenancy may be an option (this is obviously subject to legal advice for your individual situation - you may have better asset protection in your fathers name for example). Life tenancies are rare and often overlooked but may be appropriate in your situation.

 

Can someone please suggest a lawyer in Melbourne that could meet with my dad to explore this with?

 

If they didn't need to be in Melbourne (not sure they would) @Terry_w if taking new clients would be my bet.

 

Does't look like we'll go ahead with this. My dad would much rather live somewhere where the population happens to be very low. Thanks for all your advice.

 

Poor Walda!