How to Divide Renting/House costs on part buy Dilemma?!

Sir_Danalot

Ok, thanks. See, my dad was adamant otherwise and had lots of good arguments to the contrary. Thing is, I will have put in that lump sum, so how does my partner even that up? That probably sounds a bit cold, im sorry! I'm just trying to think of it in money terms for simplicity (erm, kinda!). I mean, we aren't planning to split up! Just in case.

tweetyshells

She evens it up by paying rent and getting NOTHNG back at the end of it. Where as you will get 25%.

sdooley

There are many ways to do this. One way would be to pay in the capital and then she pays the rent. Another would be for you to pay in the capital now and split the rent 50:50 but with your partner paying you back her share of the capital (without interest) over a period.

But have you considered just buying a place outright? Or renting together for a while?

Sir_Danalot

tweetyshells wrote: »

She evens it up by paying rent and getting NOTHNG back at the end of it. Where as you will get 25%.

Ok, so maybe after a certain time paying rent she could get some of 25% if we split up? What about that?

Sir_Danalot

sdooley wrote: »

There are many ways to do this. One way would be to pay in the capital and then she pays the rent. Another would be for you to pay in the capital now and split the rent 50:50 but with your partner paying you back her share of the capital (without interest) over a period.

But have you considered just buying a place outright? Or renting together for a while?

Ok, thanks. Interesting about paying her share of the capital back. I mean, what would you think was acceptable? My income is not good right now, so for me the first option would enable us to move in together more easily. That may change, but for now I'm stuck.

tweetyshells

I guess its something you need to talk over with her. What does she think about it all?

sooz

I agree with sdooley - you should consider renting together.

In a rising market, you would put 25% in and hope to get a larger 25% out.
But it's not rising now, plus you are looking at a shared ownership place, making this a receipe for disaster. Most S/O places are overpriced cons, shoddily built & in terrible locations, which are nearly impossible to sell on. Plus, you are not earning & she has no credit rating.

Sir_Danalot

Well, we could hold out for longer and try to buy a place. I don't want to waste my savings on rent though, cos then it's gone. Prices can't fall forever though, and they always go up again. I should imagine they have a bit more to fall though, but will that really hit the low end of the market, where we would be looking at buying? Isn't it mainly the more expensive places that are falling?

JimmyTheWig

Firstly, is the rent on 75% of a £135k property really just £210 a month? This sounds ever so low to me?

Secondly, there is no "fair" way to do this. But here are some ways that make logical sense to me. Whether they fit your situation or not is up to you...

* You could argue that you are each responsible for half of the house each. You will be buying half your share of the house (half of a half is a quarter) and renting the other half of your share. Your partner will be renting all their share of the house. That would leave you responsible for a third of the rent, with her responsible for the other third. I.e. if the figures are correct then you would pay £70 rent and she would pay £140 rent.
In this scenario the quarter of the house would be solely yours. Anything it was sold for (whether more or less than what you pay) would be yours.

* You could lend your partner the money to buy her half of the 25% stake you are buying between you. So you both pay half the rent but she pays you back half the £32.5k, plus interest, over an agreed period. This might be [strike]£217[/strike]£108 a month for 25 years.
In this scenario the quarter stake is jointly owned. When it is sold the proceeds (whether more or less than you paid for it) are split down the middle. Your partner would then have to pay you back anything she still owed you from her proceeds. This could leave her owing you more than she receives.
This would be the equivalent of her getting a mortgage, but as you trust her and the banks don't she will be borrowing the money from you not them.
[Edit: This is similar to what sdooley suggested in post #14, though they suggested interest-free, in which case it would be £54 a month.]

* You could decide that you are in it for the long haul and to pool your finances. I presume that though your partner earns more than you, that is due to the nature of her job rather than it being your fault. I.e. I am assuming you don't really have the option to earn more than you do.
Do a joint budget and work out your outgoings. Work out how much is left for spending / enjoyment. Have all your money paid into a joint account then from their take half the spending / enjoyment money each into your own accounts and that is up to you what yuo spend it on. I don't see the point in one person in a relationship having more to spend than another.
In this scenario you will have to decide exactly how you are buying the share of the house, in case you do split up. You might decide that if you get back less than you paid for it then all of that money is yours and the shortfall is lost and that if you get more than you paid then you get what you paid and any surplus is split equally.


Like I say, you need to decide what suits your relationship. But before you do much else, I really do think you should check the rent figure.

Sir_Danalot

Thanks Jimmy, some good info to think about there. Yes, I may have under estimated the rent a bit. The rent on a 120k place, when buying a 25% share is £219 on a recent example I looked at online, so a place worth more (130k) will have a bit more rent too. It is mainly the principal I am trying to decide on though, the places I have looked at have been around about those figures.