Thinking of buying with a friend, 50-50. Opinions needed.

G_M

And talking of molehills becoming mountains, have you agreed what happens when one of you wants to move a girlfriend in (or boyfriend)?

Both the financial implications (does she contribute to bills? pay rent? etc) and the social implications (what if the other one just can't stand her/him......)

Personally I agree with those who have said this arrangement is a disaster waiting to happen.

Bear in mind that joint property ownership is a bigger commitment than marriage.......

Wyndham

Sharing bills equaly is fine, until one of you uses lots of water for baths, or spends a lot of time on the phone (assuming a land line)....

adonis10

Wyndham wrote: »

Sharing bills equaly is fine, until one of you uses lots of water for baths, or spends a lot of time on the phone (assuming a land line)....

Noone would ever move in with anyone if they considered every single possible nuance.

And landlines? Do people still use those?! Both have mobiles with millions of free minutes per month so think that's the least of our worries.

I haven't underestimated what is involved, I just asked for opinions on the financial side of things.

In an ideal world, we'd go 50-50 on the deposit and rent the whole place out and try to make money, but it's only me who has the cash to do that and put down a sizeable deposit on my own place.

spadoosh

adonis10 wrote: »

Finally, a rational and calm response!

On a) we actually haven't discussed this but I used this as a hypothetical example in the event that this did happen. I would hope that he agrees with the logical explanation that I'd put the 100 with the tenant's 350 for my side of the mortgage.

Im of the opinion all responses have been rational and calm.

What your proposing isnt hard to do, it would just be a case of a solicitor sitting with you for an hour or so discussing. It happens every single day with partners buying together.

What your suggesting is irrational are the responses from the question you asked ie thoughts and opinions of buying with a friend 50-50. No arguments about it, this in general is a bad idea unless its needed.

Not irrational, there are many many real problems you would face doing this not to mention relying on someone who at the end of the day will put their own interests first just as you would. At least when a couple buy together there is a common goal, i don't see what yours is except maybe to avoid paying rent for a few years?!

Essentially your risking a lot and getting very little reward, why would you do this?! Honestly what do you hope to gain from doing this?! cutting costs? money making?

antrobus

What the OP needs to consider is a deed of trust.

See, for example, http://findlaw.co.uk/law/property/buying_property/500297.html

adonis10

spadoosh wrote: »

Im of the opinion all responses have been rational and calm.

What your proposing isnt hard to do, it would just be a case of a solicitor sitting with you for an hour or so discussing. It happens every single day with partners buying together.

What your suggesting is irrational are the responses from the question you asked ie thoughts and opinions of buying with a friend 50-50. No arguments about it, this in general is a bad idea unless its needed.

Not irrational, there are many many real problems you would face doing this not to mention relying on someone who at the end of the day will put their own interests first just as you would. At least when a couple buy together there is a common goal, i don't see what yours is except maybe to avoid paying rent for a few years?!

Essentially your risking a lot and getting very little reward, why would you do this?! Honestly what do you hope to gain from doing this?! cutting costs? money making?

Why are we risking more than if a man and partner put down 30k each and then decided to sell after 5 years? We're not stupid, we're obviously looking for a place that we can buy cheaper than the asking price (circumstances of seller) with a view that property prices will rise in the next 5 years, by which time we'd have more equity in the place (yes, or the other way, but this is something we both understand).

spadoosh

adonis10 wrote: »

Noone would ever move in with anyone if they considered every single possible nuance.

And landlines? Do people still use those?! Both have mobiles with millions of free minutes per month so think that's the least of our worries.

I haven't underestimated what is involved, I just asked for opinions on the financial side of things.

In an ideal world, we'd go 50-50 on the deposit and rent the whole place out and try to make money, but it's only me who has the cash to do that and put down a sizeable deposit on my own place.

Right we got it, its an investment. In that case your making an investment personal by moving into it. How do you expect to be making money when you are renting out one room for £350 p/mth and paying £100 to cover the mortgage. As well as this other costs would need to be involved, ie tax implications pending on who was living there, insurances, upkeep of property (one bad tennant can cost 10s of thousands) not to mention when you cant find a tennant and are massively forking out money. And your wanting to do this making no short term money (ie profit on mortgage) in the hope that when it comes to sell (guessing about 5 years) house prices have increased. Market indications are suggesting very little growth in the housing market over the next few years if any at all!

I promise, you will not make money from this, and by make money i mean in real terms, not on todays prices in 5 years.

Put your money in an ISA, itll probably do better there than in a house for 5 years.

adonis10

spadoosh wrote: »

Right we got it, its an investment. In that case your making an investment personal by moving into it. How do you expect to be making money when you are renting out one room for £350 p/mth and paying £100 to cover the mortgage. As well as this other costs would need to be involved, ie tax implications pending on who was living there, insurances, upkeep of property (one bad tennant can cost 10s of thousands) not to mention when you cant find a tennant and are massively forking out money. And your wanting to do this making no short term money (ie profit on mortgage) in the hope that when it comes to sell (guessing about 5 years) house prices have increased. Market indications are suggesting very little growth in the housing market over the next few years if any at all!

I promise, you will not make money from this, and by make money i mean in real terms, not on todays prices in 5 years.

Put your money in an ISA, itll probably do better there than in a house for 5 years.

I should have made this more clear; in an ideal world it would be an investment where both rooms would be rented out, resulting in an excess (yes, before expenses) for me. The 350 tenant + 100 example related to an instance where I'd live in the property and then, for whatever reason, needed to move back with my folks for 6/12 months. I obviously didn't mean that as an investment, I'm not stupid.

Would putting 30k into an isa (which, as you know, would take over 5 years to do, £5640 limit per annum) and renting a place for 5 years be more beneficial? There are a lots of ifs and buts.

spadoosh

Youd be lucky if you had 5% more equity in the place. You keep saying your not stupid, this im not arguing with. Look at the numbers and predictions. Property is no longer a get rich quick scheme especially when theres soo much uncertainty.

And your risking more because a couple have the intention of being together throughout the course of ownership. Personally think its daft for anyone to buy who intends on moving in 5 years, youd have paid very little capital off, that much uncertainty at the mometn that prices could plummet as well as rise so very good chance of being stuck in that property (negative equity means you can not move house without having to pay to do so)

Im not stupid, early 20's bought a property thats a fantastic FTB home yet is perfectly suitable for a family home should the need arise to stay in this house, something i put careful consideration when looking at a quick doer upper (which ive since noticed has been rennovated and isnt sold, yep that couldve been me sat on an empty house) or a 3 bed family home thats probably too big for us right now but allows us to be stuck here if worse comes to worse.

C'mon, think outside the box and stop watching homes under the hammer.

adonis10

spadoosh wrote: »

Youd be lucky if you had 5% more equity in the place. You keep saying your not stupid, this im not arguing with. Look at the numbers and predictions. Property is no longer a get rich quick scheme especially when theres soo much uncertainty.

And your risking more because a couple have the intention of being together throughout the course of ownership. Personally think its daft for anyone to buy who intends on moving in 5 years, youd have paid very little capital off, that much uncertainty at the mometn that prices could plummet as well as rise so very good chance of being stuck in that property (negative equity means you can not move house without having to pay to do so)

Im not stupid, early 20's bought a property thats a fantastic FTB home yet is perfectly suitable for a family home should the need arise to stay in this house, something i put careful consideration when looking at a quick doer upper (which ive since noticed has been rennovated and isnt sold, yep that couldve been me sat on an empty house) or a 3 bed family home thats probably too big for us right now but allows us to be stuck here if worse comes to worse.

C'mon, think outside the box and stop watching homes under the hammer.

Fair points, but I don't intend to stay in any house for 30 years. I don't intend to have kids or get married etc. I am not saying I'll be alone, but I just don't believe in the whole 30 year relationship thing. I like things to be fresh which is why I'm not really up for living with a partner at this stage, ie. it is a face that familiarity breeds contempt.

Ok, you know more than me as you've been there and done it, whereas I have only ever rented or lived with parents.

My situation - 28, not married, earning ~25k, 90k cash to use in some way, do not want to be mortgaged to the hilt so that my whole life is concerned with paying the mortgage (hence why considering going halves because an 800-1000/month mortgage is not for me). As a bachelor pad, I'd be happy to pay 150k for a flat (although flats come with annoying additioanl expenses); would you just use the 90k for that and have a manageable 60k mortgage?

I have another friend who wants to go halves on an investment property 10-15k each deposit on a 150-170k place, ideally 3 rooms to be fully rented. (People, please do not comment on the intricate details, I'm only interested in the financials at this stage).

Option a) 90k deposit, ~60k mortgage as a place to live in and not be concerned with trying to make a quick buck, or option b) 75k deposit, 75k mortgage and then 10-15k into an investment property whereby the total rent is ~100-200 higher than the mortgage each month. (Please don't comment on additional bills like maintenance as I am fully aware that such things exist). Just looking at the fundamental financials to begin with.