The purchase of a property with your best companion may seem like a good idea: half the deposit and half the risk, and double the fun, right?
All is well while the times are positive. But what will happen if your friend gets sick or loses his job and can not afford half of his mortgage?
This is one of the many considerations that future owners do not take into account when planning enthusiastically for the creation of a joint venture.
Jacob Duane of Bennett & Philp, a law firm specializing in real estate and real estate law, says that relationships can often break down after a poorly considered double purchase. He adds that even if there is a long list of things that investors should do when they buy a property, the list of what they should not do is even longer.
"One often reads only success stories, but the fact is that it is not difficult to make mistakes that could have serious legal and financial consequences," says Duane.
"These mistakes – many of which are easily avoidable – are sometimes mistakes that you may not know at the time and that could potentially hinder the success of any real estate investment. It is therefore imperative, as a real estate investor, to do your research and to call on qualified consultants who work in your best interest. "
For example, buying an investment property with friends and family may seem like a good idea at the time … but this might well prove to be the biggest mistake you can make.
The real estate and finance specialist, Noel Whittaker, said that when looking for an investment partner, you should look closely at the differences in temperament, age and investment goals.
Whittaker adds that changing circumstances, such as new relationships, death or sudden unemployment, are also essential factors in balancing a trading partner – and do not make any mistakes at all. subject, an investment decision is a business decision.
"Your best business partner is always the bank. all they ask is that you pay them interest, "says Whittaker.
Avoid this error in:
Think carefully before investing with family and friends.
By choosing to invest with your friends and family, you may not have any choice but to sell their assets at greatly reduced prices, usually because of financial difficulties. This kind of result can seriously put your relationships to the test.
"I've seen these investments degrade many times and it's not worth it," says Duane. "To save you money, time and stress, I strongly advise against it."
To learn more about the full story of the top five property mistakes, read the full article from the February 2019 edition of Your Investment Property.
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January 10 to February 14, 2019
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