Hi everyone,
I am in my final stages of buying a second property and I am starting to wonder if having a partner in crime would be worth my while.
How many of you have teamed up for investing, and what are your thoughts?
Cheers
James
For what purpose?
If you are short on deposits and/or cashflow maybe.
It can complicate things. For example do you have the same goals, expectations etc.
What if one wants to sell and you don't? What if one gets married and the partner takes them to court to get their assets?
If you can do it alone I think it's better. If you have 2 you are on your way. What's stopping you from getting number 3? Work out what you need to change to allow you to move forward.
Remember that joint buyers will have half the ownership but the ENTIRE responsibility for the mortgage if the other owner defaults on their portion of the payments. This would sting if your partner did indeed default, but will also sting big time when you go for IP # 3 and find your serviceability is shot because according to lenders, you are responsible for the ENTIRE mortgage of IP #2, not just half of it.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi James
Can i be so bold to ask you why you feel you need to take on a partner for your next purchase.
You mention that it is your second purchase so you have been there before and i am wondering what you believe a partner will bring to the table.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I agree with the above. I've done a JV with a mate and everything is fine with it but the bank does view it as they half the rent as your rental income and the full loan including what the other party owes owe. If servicability isn't a problem than it can have its benefits. I think JV works best in property flips. Less chance of you taking the burn if it backfires and you have a extra set of hands to help renovate with. Plus its a short term purchase so the partnership has got less chance of souring.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
I plan on using trusts to keep investments safe from external threats.
But…
I agree with what is being said.
Cheers
Why?
The underlying reason to 'pair up' is the key.
Being joined at the hip even in a trust needs to be carefully thought through.
If you are seeking a sounding board – find someone who is in the same sphere and meet up for coffee on a regular basis. Share ideas and stay on track that way.
We JV with our investor partners all of the time and it works out well for all parties but we are almost always using cash. Better returns are produced by leveraging and our partners appreciate the returns for passive activity. What is it that you are looking to do?
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