Co-ownership and property investment
What is co-ownership?
Co-ownership is a way of sharing the ownership of a property between two or more people – friends, family members or partners (also called tenants-in-common).
For investors, it involves:
- Pooling your money with others to put down a deposit on a home;
- Combining your borrowing power to get a good home loan;
- Earning a stream of rental income; and
- Having the flexibility to sell out your share of the property if you want to.
Sharing the ownership of an investment property has many advantages. You can split the cost of purchasing the property (like the purchase price, legal fees, conveyancing, stamp duty, building reports etc) which means you can get into the property market at a fraction of the cost you’d pay if you were buying on your own. You can also pay your mortgage off sooner and get a good return on your investment.
A co-ownership agreement
If you’re ready to take advantage of the benefits of co-ownership, it’s important to get a legal expert to make sure the co-ownership process goes smoothly. Even though you don’t intend to occupy the property, co-owning an investment property can present investors with a number of tricky issues, so it’s vital that you get your intentions & rights in writing.
A co-ownership agreement is a legal document which sets out the rights & obligations of each person with a share in the property. It deals with all the important issues upfront, like what happens when one person wants to sell their share, when someone defaults on their mortgage payments and more. Most importantly, a Co-ownership Agreement is legally binding on each of the co-owners, to ensure there are no legal hassles down the track.
PodProperty is Australia’s leading provider of co-ownership agreements and has made the dream of owning an investment property come true for thousands of investors right round the country. Their agreements are easy to understand, affordable and cover all the issues when it comes to sharing property as tenants-in-common.
Group finance
Buying an investment property with friends or family allows you to split the purchase price and get into the market for less but you’ll need to carefully consider your mortgage options.
Mortgage Choice can help you choose from over 300 home loan products and advise you on the home loan options available to you when purchasing property with your friends & family. And, with a well-drafted co-ownership agreement in place, you can have peace of mind when it comes to financing your purchase and paying it off.
What’s the legal principle behind co-ownership?
Tenancy in common differs from joint tenancy in a number of ways, especially when it comes to passing on your share of the property, owning land in equal or unequal shares and what happens in one party dies before the other(s).
For a great source of information about co-ownership and the benefits of investing in property with friends or family, download PodProperty’s Investor’s Guide.
How to get started?
Your Mortgage Choice broker is a good starting point to start the discussion about co-ownership. We can help you realise your home owning dream by:
- setting up a meeting with you to discuss your co-ownership options
- helping you to choose a home loan that suits you from the hundreds of loan products that we have available through our panel of lenders
- assisting with the paperwork
- and doing all the running around.
Mortgage Choice will work with you to ensure your group gets a home loan that suits your situation. Their knowledge and advice on co-ownership and home loan options is at no cost to you.