Buying together – how to ensure it’s a good investment

Q: There’s always a risk when buying with someone else, what can I do to ensure I’m making a good investment?

A: Research shows that more and more people are buying with friends or family members in a bid to get on the property ladder. However, if you’re going down this route, you need to think long and hard about how this will work and be sure to agree on the terms and ground rules at the outset.

Firstly, you need to agree on who owns what percentage of the property and you need to confirm this with your solicitor so it can be registered accordingly. You also need to agree the outgoings of the property – how will you pay the bills? For example, will you each pay into a joint account or will you pay 50% each directly to the mortgage company and utility providers and so on. This also applies to general maintenance – it’s the little things that need to be thought of, even including the issue of who will change the light bulbs. They’re small points but they can really rile people and the last thing you want is for your relationship to break down on this basis.

It’s best to approach this in a very commercial manner and think of it as you would if you were setting up a company together; outline the rules and think about the terms on which you might sell the property. We see it a lot where two professional friends buy together, one then meets a spouse and wants to sell their share, but the other can’t afford to buy them out. The more scenarios and situations you can pre-empt, discuss, and agree on, the better.

Etiquette ground rules are very important too as they’ll most likely determine whether you’re still friends at the end of the day. For example, you may agree that one Saturday night per month you each have the property to yourselves, or you may agree to certain housekeeping rules relating to keeping the property clean or tidy – again not always obvious things, but hugely important discussions to have.

So, as long as you agree everything – even the very minor details – upfront, the investment should be a successful and enjoyable one.

If you have a question you’d like Jo to answer please email or tweet her @joeccles.