Capital investor in family members property - how should it work?

Hoenir

surfer91919 said:

After this time they will sell and get a mortgage or downsize/ move to a cheaper post code area.

Will they though. As matters stand they'll have the benefit of a much nicer property than their personal finances can afford. Seems they are the only winners from the arrangement.  

jimjames

surfer91919 said:

Hi all,
I'm considering investing in a family members house for 5 years (declaration of trust to secure it). After this time they will sell and get a mortgage or downsize/ move to a cheaper post code area.

What's the reason they're not getting a mortgage now for a property they can afford? It would seem like the most logical solution and avoid all the costs of buying and selling a property they don't want.

MeteredOut

Sounds inherently risky. What if they can't get a mortgage in 5 years, even for a downsize property? eg, they lose their job.

IanManc

I think it's a really lousy idea and I wouldn't touch it with a bargepole. There seems to be no realistic upside for the OP whatsoever.

Eco_Miser

As said already, this is a recipe for family strife. But if you want to help your relative, just lend them the money, possibly charge interest, but don't link it to the value of the property. You still might not get your money back, but there's no argument about who pays for improvements or sales charges.