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

J_i_m

Personally I wouldn't want to go into an arrangement like this at all. Things might be very exciting, mutual & amiable now.. but it only takes a small change of circumstances and then all manner of disagreements could happen and then you're stuck in a failing relationship with any kind of hassles.

Tixy

adonis10 wrote: »

Why are we risking more than if a man and partner put down 30k each and then decided to sell after 5 years?

Because couples who live/own together generally share finances. So if one loses their income between them they'd try to cover their essential bills, not just on the house but debts etc.

If you have a joint mortgage then your are financially associated on your credit files.

That means if he (or you) loses your job and can't keep up repayments on your credit card, or car finance or any other non mortgage debt - then the other person is going to find their ability to get credit is massively impacted by the other person's messed up credit file.

Worse still of course it is the one who has lost their income can't even afford priority debts like the mortgage and utiltiy bills - and the other party finds himself having to pay up the whole lot - if they are in financial positiont to do so.

Personally and given what you've said about your situation - I'd consider buying on your own but perhaps getting a property with enough space that you could have a lodge to help with the mortgage cost in the short term.

clw1

I think that you and your mate need to think carefully about how your lives may change over the next 5-10 yrs. Will you want to move in with partners, get married, have kids ?? if so would either of you need the £30k back in order to buy somewhere else. Buying & selling is so expensive that you might end up with a loss so make sure if you go for it will suit for the longer term rather than only for a couple of years.

Maybe you and your friend could rent somewhere together for 6 months to see if you live well together before you commit to a purchase.

One other thing to consider is that if you are not living at the property then you would be liable for capital gains tax on any profit over £10k.

adonis10

clw1 wrote: »

I think that you and your mate need to think carefully about how your lives may change over the next 5-10 yrs. Will you want to move in with partners, get married, have kids ?? if so would either of you need the £30k back in order to buy somewhere else. Buying & selling is so expensive that you might end up with a loss so make sure if you go for it will suit for the longer term rather than only for a couple of years.

Maybe you and your friend could rent somewhere together for 6 months to see if you live well together before you commit to a purchase.

One other thing to consider is that if you are not living at the property then you would be liable for capital gains tax on any profit over £10k.

I've already said that I don't intend to have kids. I can't see inside his head, I can only make a judgement based on what I know.

I don't see the point in renting for 6 months and flushing 2.5-3k down the drain. Renting isn't going to give us any idea about the housing market in 5 years time. We will work out any differences in an adult way.

I am tempted to stick 70k down for a 140-150k place of my own, with a manageable mtge payment and the option to rent out both rooms if needs be.

spadoosh

A buy to let property should be looked at long term (ie 10+ years) thats how you make money out of it. Your certainly going to struggle to get capital gain out of it in the first 5 years.

Personally i wouldnt be looking to buy a house knowing i would be moving in a couple of years, therell be very little gain. And would look at doing a solely BTL. That situation you do have a house (thats paying for its self to an extent) your mortgage wouldnt be very big and rent should easily cover this and general running costs. Thus leaving you more or less exactly as you are now, free to roam, pillage and plunder. Using your income to do as you please (move were you want (rent!) not tied down etc) 10 - 15 years down the line youll be sat on a property (that should have increased in value over the longer time) probably not too far away from doubling your 90k investment.

Theres plenty of options open to you.

adonis10

spadoosh wrote: »

A buy to let property should be looked at long term (ie 10+ years) thats how you make money out of it. Your certainly going to struggle to get capital gain out of it in the first 5 years.

Personally i wouldnt be looking to buy a house knowing i would be moving in a couple of years, therell be very little gain. And would look at doing a solely BTL. That situation you do have a house (thats paying for its self to an extent) your mortgage wouldnt be very big and rent should easily cover this and general running costs. Thus leaving you more or less exactly as you are now, free to roam, pillage and plunder. Using your income to do as you please (move were you want (rent!) not tied down etc) 10 - 15 years down the line youll be sat on a property (that should have increased in value over the longer time) probably not too far away from doubling your 90k investment.

Theres plenty of options open to you.

This is the option I'd prefer. Perhaps I'm trying to over stretch myself, especially given my salary and lack of commitment.

So what sort of deposit would you suggest? Whack down the 90 on a btl (3 bed) capital repayment, then rent for my home wherever that may be? I've considered this, too. Might be a better bet.

adonis10

spadoosh wrote: »

A buy to let property should be looked at long term (ie 10+ years) thats how you make money out of it. Your certainly going to struggle to get capital gain out of it in the first 5 years.

Personally i wouldnt be looking to buy a house knowing i would be moving in a couple of years, therell be very little gain. And would look at doing a solely BTL. That situation you do have a house (thats paying for its self to an extent) your mortgage wouldnt be very big and rent should easily cover this and general running costs. Thus leaving you more or less exactly as you are now, free to roam, pillage and plunder. Using your income to do as you please (move were you want (rent!) not tied down etc) 10 - 15 years down the line youll be sat on a property (that should have increased in value over the longer time) probably not too far away from doubling your 90k investment.

Theres plenty of options open to you.

This is the option I'd prefer. Perhaps I'm trying to over stretch myself, especially given my salary and lack of commitment.

So what sort of deposit would you suggest? Whack down the 90 on a btl (3 bed) capital repayment, then rent for my home wherever that may be? I've considered this, too. Might be a better bet.

Catblue

OP, probably the best thing to do would be to buy an affordable house yourself and get a lodger in for the second bedroom. Your idea of putting down 70K on on 150K place seems to be the best option right now.

The advantages of this are:

- Gives you a place to live
- Leaves you with some cash for savings
- Gives you an income from the lodger
- Gives you the flexibility to kick out the lodger at short notice
- Allows you to move out yourself in time and rent the entire place out if you want
- Allows you to make the decision to sell should you ever meet anyone or just want to move on

And the best thing is that everything to do with the house is entirely your decision - no need to negotiate, argue, get into complicated "What If...." scenarios that people have mentioned here. You'd be daft to shackle yourself to another person financially when you don't have to.

Kynthia

Are you going to consult a solicitor and get a Deed of Trust? It's advisable.

geoffky

I really hope you are not doing this for profit, you could be a old man before we see price rises that are worth talking about.
The economy will trundle along for the next god knows how many years and where are the factors for price rises coming from.. we are the new japan!!