Triplets buying properties together

teddysmum

Whitee wrote: »

The home wouldnt be us 3 living together

You want to buy the house you are in while the others rent elsewhere or do you mean to buy three properties with all three on three mortgages or you want your present home as a BTL ?

Whitee

Yes I was thinking buy 3 properties on 3 mortgages together. Starting this I thought why not all put in and buy the house we are currently in - maybe one or more can stay living here a bit longer and save a bit more money as we wouldn't be paying as much rent as I'm sure the mortgage would be cheaper than the current rent.

The house we are in is the family home which we have lived in all our lives. Due to poor circumstances my Mother sold the house years ago to free up some money but we stayed living in it paying rent.

Buying this house would be a long term investment, my mother would stay living here long term along with us 3 before we buy other places of our own to move in to.

My thoughts were if we buy separately we put all our money into a property each probably paying more interest than what we would if we bought properties together.

Does this just sound a daft idea?

tom9980

Whitee wrote: »

Yes I was thinking buy 3 properties on 3 mortgages together. Starting this I thought why not all put in and buy the house we are currently in - maybe one or more can stay living here a bit longer and save a bit more money as we wouldn't be paying as much rent as I'm sure the mortgage would be cheaper than the current rent.

The house we are in is the family home which we have lived in all our lives. Due to poor circumstances my Mother sold the house years ago to free up some money but we stayed living in it paying rent.

Buying this house would be a long term investment, my mother would stay living here long term along with us 3 before we buy other places of our own to move in to.

My thoughts were if we buy separately we put all our money into a property each probably paying more interest than what we would if we bought properties together.

Does this just sound a daft idea?

Reasons its a daft idea

1. Complicated tax situation.
2. Your all young and will have varying changing circumstances in the next 10 years, including children, moving jobs, new partners etc
3. Your mum living in the property can get very complicated when one of you wants or needs to sell.
4. Doing it through a LTD company can get complex and generally not worth it until you have 5+ properties minimum.
5. Extra Stamp Duty to pay on future property due to recent tax changes.
6. What happens if the Government introduce new taxes as is the current trend to blame Landlords for the countries problems with housing.
7. Using Letting Agents are costly often not worth it because you are liable not them for any problems.
8. The massive amounts of admin much of which is time consuming and easy to get minor details wrong.
9. Non paying tenants
10. Maintenance fees, who pays if the boiler goes? what if that roof needs extensive work? you need deep pockets being a Landlord.
11. What happens if the market crashes like in 2008?
12. Tax advantages from investing in Stocks and Shares ISA's and pensions make this a better way to invest in many cases.

I am sure the list above is just the start.

G_M

Whitee wrote: »

Our if curiosisty how much is additional stamp duty?

3% extra on top of the standard SDLT.

As for your plans, I'm now totally bemused. Maybe you could clearly state:

* how many properties each of you currently own (soley or jointly)
* whic of these properties you each currently live in
* how many ew properties you planto buy
* who will own (soley or joitly) each of the new properties
* whether any properties will be sold, and if so a) which, and b) in what order
* who will ultimately live in each property
* which property/ies will be let out.

Your plan seems to constantly change!

teddysmum

I would think it unlikely that lenders would allow each person on three different mortgages, as if one fell on hard times, all three accounts would be affected.

martindow

Whitee wrote: »

The house we are in is the family home which we have lived in all our lives. Due to poor circumstances my Mother sold the house years ago to free up some money but we stayed living in it paying rent.

Who owns it now and are they going to be interested in selling?

teddysmum

I have the feeling that you believe the £40000 salary will boost the borrowing power of the £25000 earners, but if you apply the X4 rule, the total loan would be 4x£90000 (ie £360000) and not per property.


Each mortgage offer would take into account any debts/commitments elsewhere. In fact some lenders even grill potential customers about lifestyle and spending habits.

dimbo61

Start off by buying a First house !
Brother earning £40,000 can afford to buy the property you are currently living in or something similar on his income alone.
You both move in as Lodgers and he charges rent ( rent a room scheme )
Build up savings until either you or your sister can buy a place to call your own.
You might need to pool your savings towards the first deposit but then brother can repay this once he has paid for the legals, survey, Mortgage fees etc

saajan_12

Don’t understand your plan at all. Please answer the below
1) How many properties you all currently and eventually hope to own
2) Who you plan to live in each property (tenant / how many of the joint owners)

There are two main factors in mortgages:
1) Affordability -> total income of the borrowers – total outgoings (including servicing debt) determines whether and how much you can borrow. While a higher income may open you up to a couple more lenders giving you a wider range of rates to choose from, but in general higher income doesn’t lower the rate.

2) LTV -> (property price – deposit) as a proportion of property price determines the interest rate, so higher deposit would give you slightly lower rates. Yes combining your deposits for the first property may give you a lower rate for the first property. However if you bought separately with lower deposits and still saving as you currently expect, you could overpay with the savings and remortgage to get a lower rate when your LTV drops enough, so the rate difference would only be for a couple of years.

TAX
By buying together, after the first house, subsequent purchases would attract higher rate stamp duty (3%) as you would all own a share in a property. Also, anyone that didn’t live in a property they own would be liable for Capital Gains Tax (18-28%) on sale.

Overall the only saving is a tiny rate difference due to larger deposit for a couple of years, mitigated by potentially higher tax. HOWEVER jointly owning a property is a big commitment. If anyone wants to liquidate their share e.g. if they need the money, move areas, lose a job, grow their family, purchase with a partner etc it can get very complicated. One of the joint owners would need to have the money and mortgage affordability to buy out their share, or everyone sell on the open market – either way this upsets the plans of other joint owners. The transactional cost (legals, mortgage fees, EAs etc) of this are likely to outweigh any interest rate difference. Further, consider the potential family issues with forcing co-owners to sell / buyout when one person’s circumstances change.