Shared ownership with family

Niltava

My O/H and I are thinking of putting a cash lump sum (somewhere between 50k-100k) into a property that her younger sister and her husband will live in and get a mortgage to cover their part of the cost (they have about 15k to put down as a deposit, and both have jobs with a reasonable joint income).

Myself and OH would be putting our money in as an investment, looking for capital growth on the value of the property (which is in an area where prices are definitely going up), and the four of us would make a legally binding contract defining the ownership.

Has anybody out there got experience (good or bad) of this kind or arrangement?

If myself and O/H were to purchase a buy-to-let and rent it out to strangers we could get monthly rental income, so given that my O/H's sister and hubby will need a smaller mortgage than if they were buying on their own, is it reasonable for us to charge them some "rent" each month that they pay to us on top of their (smaller) mortgage repayments they make to the bank?

Thoughts and ideas please (or just direct me to another thread if this topic has been done to death!).

Thanks

N

anselld

I doubt they will find any Mortgage Company who will accept that arrangement.

You would incur SDLT surcharge on the whole transaction.

It seems a bad idea anyway, liable to lead to family disputes. You are already questioning the fairness of your "share" and the scheme hasn't even left the starting line!

marksoton

Niltava wrote: »

Thoughts and ideas please (or just direct me to another thread if this topic has been done to death!).

You're mad. As mad as a badgers badger.

And as pointed out, it ain't going to happen.

csgohan4

money and family don't mix, don't do it unless your not expecting it to be paid back.

Kynthia

You'll need to be on the mortgage as well and therefore liable to pay it if they don't. They will resent paying you rent. Will this rent be more than the exra mortgage paymrnts if they borrowed more? If they don't you can't evict them as they aren't tenants but joint owners, so you will resent them. A landlord would also be responsible for property maintenance so if you want rent are tgey going to want you to contribute to works and repairs? When you want to cash in your investment they won't want to sell as it's their home. Only a court can make them sell so you'll have to spend thousands going through the courts to force it. This will possibly reduce the investment figures or they have to pay your costs and never forgive you.

Absolute insanity. If you want to invest in a property then buy one. If you dont have enough then find high interest accounts, put it in your pensions or get a stocks & shares ISA. Don't put money into a family members home as an 'investment! People only put money in as a favour and even then they don't usually expect rent or expect to see the money for a long time (if ever).

charlishae

Sounds like a bad idea to me.

You could be hit with the extra stamp duty and other costs too.

PersianCatLady

I can't actually think of a worse and more likely to end in tears scenario than the one described here.

Grenage

For the love of your future sanity, no!

Niltava

**runs away, holding hard hat tightly to head, under volley of rotten tomatoes.

Thanks for your brutal honesty everybody, it is genuinely appreciated.

marksoton

PersianCatLady wrote: »

I can't actually think of a worse and more likely to end in tears scenario than the one described here.

syphilis...........?

Cakeguts

This idea will finish up with the same arguments as people get into when someone dies. Family feuds etc.

Let them buy their own house without any help from you. Otherwise you create a really awkward situation for them.