Buying a property is a big achievement that requires commitment and dedication.
Whether you’re buying it as an investment or to live in it, buying a property is an achievement not to be understated.
While this big achievement may give many goose-bumps it is important to fully understand it before embarking on it. It is even more important to do your research when going into a joint partnership, with a friend or someone you are not married to.
Forbes magazine shares that it is important to communicate your finances well with your bank and the person you’re buying with if they are not your spouse. It is also very important to create a water tight contract for unforeseen circumstances, adds property management hub Private Property.
One other important thing to do is determine how much shares you both have, shares the property hub.
“Keep in mind, that no matter what your percentage ownership in the property is, you and your co-owner are equally responsible for paying the monthly bond instalments. Banks insist on joint and several liability, which means that both you and your partner are responsible, together and individually, for the full loan amount,” proclaims MortgageMe Director Andrea Tucker.
Andrea also suggests a good plan for the exit strategy should one opt to leave. You’ll need to “decide upfront how you will dissolve the partnership and divide any proceeds of the sale. This needs to be included in the contract. Property is a long-term investment, so forward-thinking is imperative, adds the property director.
Also see: Things to look out for when house hunting
