Anyone Have Experience with Co-Ownership of a Home?

• 

  kahn on 02/07/2020 - 11:24

  +7

  There's an instructional website called welivetogether that shows the benefits of such an arrangement.

  • 

    SkMed on 02/07/2020 - 11:27

    Ohhhh, amazing, thanks for the tip! #Goddamnit

• 

  brendanm on 02/07/2020 - 11:34

  +5

  My in law's purchased a place together with their son. It did not end well at all.

  • 

    SkMed on 02/07/2020 - 11:52

    That's a bit different no? Family is more prone to disagreements etc.

    • 

      brendanm on 02/07/2020 - 12:21

      +2

      No. Have a read of the recent thread where a guy had to sell his shared investment and lose $100k.

      If you both can't afford it on your own, what are you going to do if one of you loses their job or similar?

      • 

        SkMed on 02/07/2020 - 12:48

        Yeah I did, thats what prompted me to post this. I mean that Families/partners/spouses are more prone to financial diagreements and other disagreements. Partners splitting is far more common than friends so seems a lower risk than buying a place with a partner.

        Difference here is we are buying to live in, not invest. So we wont be paying a 2nd mortgage or rent.

        We're both in local govt, so very stable jobs. We wouldnt be buying for another 12 month or more.

        Same argument can be said for a couple buying a place though, what if one person in a marriage looses their job while paying off the mortgage? Pretty much no single person is able to afford a mortgage in Melbourne currently, you have to rely on a dual income. With our situation we'll at least have the option to rent out the third room, and have parnters chip in too.

        • 

          brendanm on 02/07/2020 - 13:00

          +1

          @SkMed: They lived in their place. All earn good money. Son got involved in things he shouldn't have. Can literally happen to anyone.

          End of the day, it's up to you, not something I would ever do.

          • 

            SkMed on 02/07/2020 - 13:26

            @brendanm: I assume you mean went off the rails/drugs? Gambling? Hm… not going to happen here lol.

            We both have decent safety nets in the event we need to sell up. Can both move back with the parentals/family.

            Still doubt we'd be worse off than renting for the next 5-10 years which is really the only other option.

            • 

              brendanm on 02/07/2020 - 13:28

              @SkMed: As long as you know what you're getting into. They actually ended up better off financially, and as you say better than renting, but very stressful.

              If you can buy at the right time, then you will do well if nothing goes wrong. Just make sure you have all situations covered.

              • 

                SkMed on 02/07/2020 - 13:37

                @brendanm: Yeah, I mean if we dont do this we'll likely end up finding a rental property together in the next year or two again anyway and just keep renting (also known as loosing money haha).

                As we have enough for a deposit (the hardest part) we might as well buy, especially if the market goes to shit as predicted (and begninng to already). We'll be holding off another 12 months or so to watch it closely.

                Combined we'll likely have close to a $200k deposit, and look to purcahse something up to the 700-800k range. Each paying about $1500 per month for the mortgage. But if the marklet takes a turn we're hopful we may get something for as low as 600-700k and be pretty well off and paying less than our rent is currently!

                • 

                  peter05 on 02/07/2020 - 21:20

                  @SkMed: Honestly I would make sure you go away and do your sums. Renting may APPEAR like you are losing money but there are many benefits with that sort of arrangement that I wouldn't be overlooking. Buying in this current climate may not be the best thing to do.

                  If you were both partnered up then I would be far more inclined to say it's a bit "better", but you don't know what sort of partner your friend will be involved with down the track. Sometimes when people partner up they can change drastically, you will keep thinking it doesn't but even within families, once siblings partner up, their "world views" or "financial aspirations" may change drastically.

                  Say for example that your friend finds a partner and then they realise they are stuck for the next 20-30 years living together with another couple and it's a deal breaker, would your friend pick the house or the relationship? At 30 years old they might still pick the house, but if your friend wants a family, perhaps getting close to the 35's range, she might want to sell up if it continues to "block" her other aspirations.

                  Not saying any of the above will happen or that they're likely, just that there are MANY unknowns which would be completely fixed by simply holding tight in the current economic climate, keep renting. from what i hear, renters appear to be able to have pick of whatever they want since so many renters have left and not returned to australia.

          • 

            SkMed on 02/07/2020 - 13:33

            @brendanm: Also I was referring to the posters "shared investment and lose $100k" that they didnt live in the property. It was an investment which is higher risk than living in/paying your own mortgage.

  • 

    DarkOz on 04/07/2020 - 09:41

    My in laws purchased a place without their son. It also did NOT end well at all.

• 

  holdenmg on 02/07/2020 - 11:36

  +4

  Hey,
  If either of your circumstances change you might like your agreement to include providing each of you the first option (but not the obligation) to buy the other party out.
  Also, should something occur that is to the other parties detriment and the property were to be sold, who would bear the costs, would it be 50/50 or something else…

• 

  Realsteel on 02/07/2020 - 11:39

  +1

  With change in circumstances (financial or personal), things can get complicated. In sounds like you guys in a similar cycle of life so buying together may sound like a good idea. This can change over the years and one person may want out but the other may not be ready. Say Market may be down and one is ready to sell and the other may not be.

  I was in a similar situation with some friends and we wanted to buy together 10 years ago. I am glad we didn't as our lives changed (for better and worse at times) at different times.

  • 

    SkMed on 02/07/2020 - 12:34

    Yeah we're definately in the same mindset and cycle of life. We are both in our early 30's and both dont want kids, both have a dog lol.

    Neither of us had considered buying in the city until recent events and a downturn in the houesing market is making us consider this option. If we dont do this we'll just be renting forever, or purchasing properties we arent happy in (apartments) or in locations we arent happy with resulting in a lower quality of life.

    We're also both pretty handy, I have access to every tool under the sun and a tonne of building materials thanks to my dad being an engineer and leaving everything to me and my siblings when he passed away and she has a degree in architecture. So buyign a fixxer-upper is an option, but we're both prepared to buy something more expensive and not do rennovations is the market crashes enough (20 percent or so)

    We'll be agreeing on a timeframe to sell. Even if we both sell and sell at a loss, we'd likely still be better off financially thant the alternative (renting) where your money just goes down the toilet essentially.

    • 

      Realsteel on 02/07/2020 - 16:30

      Contrary to popular belief, rent money is not necessarily dead money. For the areas you have mentioned, let's say you are able to land a 3 Bedroom House for around ~ $850k. (I think you may need to hunt around Preston and Reservoir?

      Total purchase cost $900k (add stamp duty $48k and buying cost (legal fees,inspection etc) ~$2k).
      Factor in 20% deposit to avoid LMI $170k
      Loan amount of $730k - assume 3.15% interest (average over the next few years/till you plan to sell)

      There are holding costs associated with properties and I have done some maths which you can amend for your purposes.

      Annual holding costs you don't pay whilst renting. This is for Darebin area where you are searching.

      Interest ($730k @ 3.15%) $22,995
      Council rates $2,100
      Water service charge $900
      Insurance differential $600 (content only vs building and content - arbitrary amount)
      Repairs & maintenance $1,000
      Total $27,595

      Not sure i have factored in everything but you get the idea. Compare this to rent you are paying. The above doesn't factor in any principal payment nor any potential capital growth associated with the property. There are other hidden costs with property - as home owners humans are inclined to decorate/furnish the place so you end up spending more money (may or may not be true for your situation).This is purely from a financial stand point. I mean there are non-financial benefits of owning a property which cannot be quantified.

      I am not in anyway discouraging you from buying - just trying to show you that the notion rent $ is dead money is not necessarily true.

      • 

        MrBear on 03/07/2020 - 16:12

        so you end up spending more money

        That is a very limited way of looking at it. You may spend a bit more money each year that you own it rather than renting, but you do own it.

        • 

          ozbjunkie on 03/07/2020 - 18:05

          @MrBear: Unless what you mean is that Realsteel has not factored in the utility value of "security and no landlord" the analysis is pretty sound.

          There's risk that your house will not increase in price, and may decrease in price, and if the gains do not outweigh the difference between interest (and maintenance and council rates and building insurance) vs rent, then you're losing money.

          • 

            Realsteel on 03/07/2020 - 21:58

            @ozbjunkie: I am glad you get my point. Yes, I called out that I had not factored in non-financial benefits in the above.

        • 

          Realsteel on 03/07/2020 - 22:02

          @MrBear: In the above, repayment of the loan is not considered so you actually dont pay the loan down. I was just giving OP an example of rent vs ownership example. I own a home myself and do encourage home ownership. In OP’s scenario, it sounds better to rent till he is ready to buy with his partner as opposed to buying with friend.

          • 

            SkMed on 03/07/2020 - 23:38

            @Realsteel: Thanks for the breakdown, I get what your saying but we're relying on a bit of a market crash to make this a reality, so hopefully we'll buy low and the financial strain won't be too bad, something close to what our rents currently cost.

            However I still don't see why it makes more sense to buy with a partner rather than a lifelong friend though? My friend is more financially stable than my partner is currently and my partner realistically won't be in a position to save and have a stable job for several more years at least, maybe longer. By the time she's ready I'll likely be approaching 40 years old and just starting a 30 year mortgage.

            Also I the way I see it is partners/marriages are far more likely to end rather than lifelong friendships so theoretically a higher risk.

      • 

        SkMed on 04/07/2020 - 00:00

        Also fyi, between us we're paying over 35k in rent per year already, so your calculations are far under our current yearly spendings on housing. Really we'd be far better of buying as we'll never see that 35k per year again.

      • 

        SkMed on 04/07/2020 - 00:04

        I also think you need to check the market. Already I've spotted some pretty decent 3 bedroom townhouses even in Brunswick for around 800k. If we go out to Preston and Resi I'm positive we'll start seeing 3 bedroom houses for about 700k or less in the next 12 months.

      • 

        SkMed on 04/07/2020 - 00:16

        Actually scratch that. Some decent 3 bedroom houses are already down around 700k in Preston, some around 600-650k in Resi. I think prices are going to drop pretty sharply over the next 6-12 months too.

        • 

          Realsteel on 04/07/2020 - 11:06

          @SkMed: I think when I read you were looking at 3 bedroom house, I took it to mean that you were considering a 3 bedroom stand alone property. Townhouses are definitely doable for the price range you mentioned and yes there has been an influx of high density housing in those areas so there will be further downward pressure on the prices.

          Generally, with a partner/married couple you share the same goals, aspirations and wants in life. So you ride the good and bad times together in every way provided your relationship stands the test of time. Not many do….

          Don't get me wrong, you are in a very enviable position with such good friendship. I know how that feels as i have a few childhood friends myself which i cherish and enjoy so much. Not many people get to have such lifelong friendships. Having said that, I value my friendship too much and would not want to compromise that by conducting business with my friends. I love catching up with them and having a beer and weekends away and enjoy the merry times - its an escape for me which I wouldn't risk losing.

          "If my friend were to partner up they'd need to be prepared to do the same" - amongst other complications, this is where you problem lies. If your friend partners up, the other party may want a different living arrangement. Everyone is different - not everyone wants a shared house - some want to walk naked, get it on in the living room and what have you…..

          Good luck with the search and hope you are able to find something good which ever way you end up buying it.

• 

  tsunamisurfer on 02/07/2020 - 11:45

  +2

  This sounds good in concept but has the potential to negatively impact your lifelong friendship.

  When property is involved things get emotional really fast.

  One is going to want parties, GF/BF staying over constantly, could be a slob, could be an obsessive compulsive cleaner, so many things.

  It could also work beautifully, it just comes down to the two….it would have been ideal if you both had rented together for a while and got to know how that feels.

  • 

    SkMed on 02/07/2020 - 12:37

    +1

    Shld have mentioned, we are both in our early 30's, so we're both over huge parties. We have the same friendship group anyway and both co-host a big poker game once a year which is usually the biggest "party" we have these days. Outside of that we both play music and tend to go to gigs more than anything (usually together too).

    My partner is also great freinds with her and i've met and loved every BF/partner she has so know she doesnt bring home dropkicks (she dated my guitarist for several years and theyre still great friends).

    We lived together for a few years already so we know each others habtis and are are a good match for living together. If we dont do this we may end up renting together again in the near future anyway.

  • 

    Lastchancetosee on 03/07/2020 - 15:04

    Also consider if one of you decides wants to sole ownership. One of you might be obliged to sell if you can't reach an agreement, or one can't buy the other out.

    • 

      SkMed on 03/07/2020 - 23:40

      Yeah that's totally fine, the plan is to sell. Neither of us wants a 3 bedroom house for ourselves, but is ideal for the two of us plus partner's. We'd be selling at some point and buying our own 2 bedroom places in the future.

• 

  [Deactivated] on 02/07/2020 - 11:51

  +4

  This will only end very well for everybody involved

• 

  dtc on 02/07/2020 - 12:20

  +2

  Forget the naysayers, buying with a friend isnt that dissimilar to buying with a spouse. Sometimes it works, sometimes it doesnt. Of course as spouses you are more likely to be at a common point in life than with friends (eg as spouses you will have a baby at the same time), so the risk is a bit higher, but its not like it has to be a disaster.

  2 things to look at

  • you buy as tenants in common (not joint tenants). This means each can sell their part of the house/keeps things a bit more separate. You can even have 'separate' loan accounts but you will still all be responsible for the entire loan, its just that you can run different accounts and pay off things at a different rate. Make sure you understand how this works

  • create/find/have done properly a 'co ownership agreement' that will determine who owns what, how things are paid for (eg what happens if one person pays for air con and the other person doesnt want it) and, as suggested, have a 'first option to buy' agreement in the event that one of you wants to sell and the other one doesnt

  • 

    SkMed on 02/07/2020 - 12:42

    +1

    Thanks!

    Shld have mentioned, we're both in our early 30's and both arent having kids. Honestly I see more couples break up than close friends parting ways 10-fold so to me this seems like a far lower risk than buying with a partner.

    Guess we have the advantage of being liflong friends who grew up in rural Vic. Country kids tend to have a bit of a closer friendship/bond than city kids in my experience.

• 

  Orico on 02/07/2020 - 12:41

  +1

  Don't do it, son. Don't do it.

  Pain, misery and betrayal awaits you.

  • 

    sa5ha on 02/07/2020 - 13:47

    -1

    Thiiiiiiiiis.

• 

  TheBilly on 02/07/2020 - 12:55

  I would recommend you both purchase separately and within your means. You are only considering this as you want to purchase outside of your means at this point. Whether your means be based on price, location or whatever. My first purchase was in another state and I worked my way up to my "I'm happy home" and didn't look for alternative and risky methods to make my ideal work at the wrong time.

  Also you are looking at this like a we'll just purchase and in a few years we'll be ahead and then we can all move on to whatever is good for us. So you are looking at this as very transitional and temporary arrangement. Property is the opposite of that. I am only starting to see progress on my properties purchased 5 years ago and my life is vastly different to what I planned to happen today 5 years ago - I'm just lucky that I purchased on my own and all decision making lay with me. Your loan balance doesn't just drop 100k in 5 years while making minimum repayments, making you ahead and flexible to make decisions. Property is the most inflexible mainstream investment and when you purchase you are 20k to 30k down from day one. To make that 20k to 30k back from minimum loan repayments is not a 1 to 3 year task.

  I would only consider joint investing for that purpose. I.e. get a group of people together for a specific scenario, fulfill that scenario and part ways. Such as a development, land bank, renovation flip etc. Short term no greater than 2 years from approval to sale.

  • 

    SkMed on 02/07/2020 - 13:12

    +1

    No, we are looking longer term, we're happy to do this for 5-10 years.

    The alternative for us both is to just continue renting inner city for close to what we'd be paying for mortgage repayments anyway. Then possibly purcahse something rural in 15 years time which would just be for weekends or to retire to…

    We've both done the rural-> city commute at one time or antoher but it simply isnt fiesable long term.

    So its co-own a desirable property in a desirable location, rent forever in a desirable location, or purcahse seperately (with/without partners) in an undesirable locations or in an undesirable porperty.

    Seems logical to me to go with the first or second option rather than live somewhere we're we'll both be unhappy for most of the rest of our lives no?

    Worse case is the market tanks horrendously after we purcahse and we sell for less than we purchased, but as it's going to be our place or residence it's pretty unlikely we'll come out worse than renting for another 5-10 years. (Currently we're paying a combined $38,400 per year in rent between us and thats likely to keep increasing). So to come out worse than renting after 5 years we'd need to loose approx $200k on the property value or $400k after 10 years. Considering our budget is going to be approx 850-900k I dont think thats very likely.

• 

  Zonty on 02/07/2020 - 12:58

  +2

  Go lawyer draw contract Between you and your friend.
  Put all scenario in
  Like,
  In case 1 co owner not able pay at that moment what you can do whether sell and devidee money or you buy off at which value who will decide market value etc.
  2. In case of death who will get your share.or your co owner share.
  3. What will happen in case of divorce with your partner etc.
  Write down all possibility
  And you and your co owner can sign contract also you might need tell your girlfriends deed and they might also need agree with such agreement.
  Good luck

  • 

    SkMed on 02/07/2020 - 13:14

    Yes, we will most definately be doing this. We're listing all scenarions we can think of now and already considering these plus more. My partner will also sign something and if she gets a partner he will need to be ok with it too.

    We have a friend who's partner is a financial advisor too so going to chat through everything with him before going to a lawyer. We also dont plan on purchasing in the next 12 months, watching to see what happens due to Covid and the recession etc.

  • 

    Bartemaus on 02/07/2020 - 14:05

    Good points here.
    Definitely want to purchase as tenants in common.
    Prudent to also update your Will should you go through with the purchase.

    • 

      SkMed on 02/07/2020 - 14:19

      Oh, yeah wills and what we do in the event of a death are on the list already.

  • 

    AussieDaddy on 15/07/2020 - 02:49

    This! OP, this is all you need from all the other comments posted here. Good luck.

• 

  northern nsw on 02/07/2020 - 13:13

  If your g/f will be living with you, as a defacto, have you thought about her entitlements to your assets, even if she is paying rent?

  • 

    SkMed on 02/07/2020 - 13:22

    Yes, we are already living together and have been for several years. As her job isnt as stable as ours she wld rather not join in financially at this time but is keen to join in 5-10 years so she can save a bit of deposit and ensure she has a more reliable job/income.

    My partner is in agreement that shes happy to pay some rent to me/my friend to help with the mortgage. The rent she pays would be lower than what we are currently paying in our rental property so its a win for her without the financial responsibility of a mortgage. Shes also happy to agree to sign something that wld say she gets x (low) percentage of the property value or a set amount in the event we split. Of course I dont envisage that heppening, but no one does, just thinking about all possible scenarios. We are also ensuring we dont buy a place that relies on her rent for us to be able to cover the mortgage, but we will have the option of renting the 3rd room in the event we do get into some financial hardship too.

    But with just the three of us the 3rd room would be a spare/study.

• 

  netjock on 02/07/2020 - 13:28

  +1

  Even with water tight agreement it will be hard to deal with human aspect (not abiding by the agreement due to change in circumstances) it depends on how much you value your friendship.

  • 

    SkMed on 02/07/2020 - 13:46

    +1

    Hmmm, well we've grown up together, travelled together, lived together, know each other's family as closely as our own family (she even lived with my Brother for several years too), we work together, play in bands together, have stable local gov't jobs, have the same plans, in our early 30's neither want kids and have the same friendship circle.

    I'd say this probably qulifies us as a lower risk than 99 percent of married/defacto partners I know to be honest.

    We're also both pretty methodical and not prone to overreacting or letting emotions cloud our judgement or doing dumb stuff with out finances/money. Neither of us have ever had a debt or even a credit card even!

    • 

      netjock on 02/07/2020 - 13:50

      depends on how much you value your friendship.

      Would you let the 1% probability of things going wrong end the friendship and all those memories.

      It is pretty easy to assume things will keep continuing as they are. But money is money. Imagine if house prices double in 7 years and your friend wants you to buy their portion out at market price but you can't afford it? Then what?

      If you can't afford it on your own and you need to depend on a friend. What is there to say you don't need to still depend on the same friend in 7 years time?

      Don't forget you're signing onto a 25 year mortgage with set monthly payments. As many people are finding out right now, long term commitments based on short term cash flows is a dire situation.

      • 

        SkMed on 02/07/2020 - 14:07

        As stated above, we are going into this and agreeing to exit on an agreed upon date, somewhere in the 5-10 year mark. We'll both be selling and (likely) purchasing our own places. If one of us is in real financial trouble and needs to pull out a before this time then so be it, we'll just do it and both sell up. Its doubltful it will ruin either of us financially, worse case I reckon we'd break even since the other option is just to continue renting. It's pretty unlikely one will be able to/want to buy out the other.

        • 

          netjock on 02/07/2020 - 14:08

          -1

          @SkMed: You obviously have better law / commercial / financial training than all of us put together. Go for it. What can go wrong.

      • 

        SkMed on 02/07/2020 - 14:07

        I mean what do couples do in this situation? At least a friend as a co-owner doesnt have the right to half my stuff haha.

• 

  resubaehtgnolhcs on 02/07/2020 - 13:59

  +4

  Op, sounds like you have already made up your mind.

• 

  Youfah Mizzum on 02/07/2020 - 14:33

  You've already had plenty of internet randoms tell you to be wary. It sounds fraught with potential future hassle. But on each reply, you always seem to have the same comeback - that you're great friends and are trying to predict each possible scenario & having some kind of fallback in case dung hits the oscillator.

  So if you're so confident, go for it!

  • 

    SkMed on 02/07/2020 - 15:11

    Yeah I expected people to say that. Most people dont have the luxury of having such close/lifelong friends who so can't really understand the dynamic I suppose. I undertnad this isnt something you'd want to do with a regular friend (i.e. not lived together, not known eachother your entire life etc.). It's really more akin to co-owning with a sibling rather than a friend.

    Asking for tips and advice from anyone else who's done it and maybe there are things we've not thought of.

• 

  mr-incredulous on 02/07/2020 - 15:00

  She has less of a deposit but happy to work to the percentages of financial input.

  If you set your sights a bit lower in terms of purchase price you could go in 50-50, which has some benefits. For example, if you went in 70-30, and some large maintenance issue came up, would you split that bill equally? If you disagree about something (like when to sell or whether to rent out a room) do you get a veto? If you rent out a room do you split the income equally?

  • 

    SkMed on 02/07/2020 - 15:21

    +1

    50-50 deposit may be an option too depending on what happens in the market over the next 12 months. But i'm happy to put in a larger deposit and have a larger percentage return especially if we can get something for a reasonable cost when the market dips.

    Also happy for her opt play catchup and pay a higher amount of the mortgage if she wants to build her percentage up closer to mine slowly and I'll just save more on the side.

    Maintentce wld be split equally as its part of home ownership and a return on the whole property at the end of the day (5-10 years).

    If she doesnt play catchup from the deposit then i'd simply be walking away with more of the % of the investment/sale at the end.

    We've already agreed on the room rental. We're happy to do it if we need, but wont be neccesary unless one of us experiences pretty extreme financial hardship. We have both been long term renters/share house veterans so used to all the things that come with sharing a space with other people so dont have much of a problem with it. We may even consider renting it out occasiaonlly/temporarily for some addtional income occasionally.

    Getting someone in to rent would go towards the mortgage as a whole and reduce our own mortgage payments equally.

    Also will be agreeing on when we sell before buying and signing contracts to lock those in (or mutually extend/reduce the sell date close to that agreed date) etc.

• 

  Earl of Lemongrab on 02/07/2020 - 15:32

  The idea is to purcahse a 3 bedroom house in the north (Coburg, north coburg, Preston, south Resi, or even eastern brunswick west or brunswick if the prices fall far enough). Combined we'll likely have close to a $200k deposit, and look to purcahse something up to the 700-800k range.

  I think you might be able to snap up a 3 room brick veneer house needing minimal repairs at the higher range (assuming you qualify for FHOG assistance).

  Market takes a turn we're hopful we may get something for as low as 600-700k

  For those suburbs? Good luck with that :) Maybe a townhouse or weatherboard house needing costly repairs. If the market makes a turn? Be sure that there will be people with more money then you.

  • 

    SkMed on 02/07/2020 - 15:39

    FHOG is only 10k no? Also only applies to newer houses and under a pretty low threshold so dont think it'll be an option. I'll take another look but With a $200k deposit upfront I think we'll make do without it.

    I've been watching the market and attending inspections the past several months, to me it appears prices are dipping already. One RE told me the owner would take an offer of $25k less than the advertised price (Advertised at 375-390k but would take 350k) located in Brunswick East (but maybe thats a dodgy RE trick? Price it high and take lower offers?).

    I'd be fine with either townhose or weatherboard. Sure beats an appartment. lol

  • 

    SkMed on 02/07/2020 - 15:41

    750,000 or less for FHOG, but less than 5 years old. We'll be looking at older places most likely.

• 

  PissLUR on 02/07/2020 - 17:04

  Not sure if this kind of co-ownership is similar to what we have in WA.

  First home buyers can co-own house with the state government under Keystart program

  • 

    SkMed on 02/07/2020 - 17:13

    I think that just nabs you the ability to purcahse a property with a lower deposit doesnt it? We'll have a decent deposit so no need for something like that for us. FHOG likely wont be of any assistance either.

    • 

      PissLUR on 02/07/2020 - 17:21

      https://www.keystart.com.au/guides-and-tips/guides/all-about…

• 

  lainey13 on 02/07/2020 - 21:04

  Er have you all lived together before? I would suggest doing this first before getting into a large financial commitment with someone you can't live with!

  • 

    SkMed on 02/07/2020 - 23:25

    Yes, of course. lived together for several years in the past (she also live with my brother for several years too), we also work together, have travelled south East Asia together, know each other's familes as well as our own, known each other for 30+ years. Both financially responsible and never had debts or credit cards etc. Also been friends with every bf/partner she's ever had and I am still friends with them to this day (one being a childhood friend and another my guitarist). Our doggos are even best friends and Both don't want kids either.

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  corollachick on 03/07/2020 - 09:22

  +1

  yes have experience with this :)
  friend of 20+ years
  bought house together, lived together then later down the track I bought him out. still great friends ;)

  good luck finding the perfect house for you guys!

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    SkMed on 03/07/2020 - 12:15

    +1

    Great to hear! :)

    I think when people read "co-owning with a friend" they just assume some random friend and can't really comprehend the idea. Our freindship essentially goes back to birth 32+ years so shes more like a sibling than most peoples defenition of a friend.

    In my experience it appears that kids who grew up in the city dont tend keep lifelong friendships since childhood, where as Counry kids tend to keep lifelong friends and generally tend to have a stronger bond (which is what we are). Our main friendship group still comprises of 80 percent of the guys/girls I went to primary and highschool with back in the country and we all moved to the city together (in a 9 bedroom sharehouse for 9 glorious years too). haha

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  Goldenwarrior on 03/07/2020 - 09:25

  +1

  I have co-owned with my (twin) sister. Given we shared a living space with each other before we were born it was a easy decision.

  Furthermore, growing up we didn't ever fight over stuff because as a twin we assumed ownership and responsibility for each others stuff, so it's a bit different from a regular sibling or friendship relationship. This is why co-ownership was an easy decision for me.

  When we bought a place and moved in together we were both single. Fast forward three years and my sister had her boyfriend living with us (I got along well with him) and I was in a serious relationship.

  Around this time my sister asked me if I was willing to sell because she wanted to get married and set up her own place in which she was able to now afford. I agreed and ended up moving in with my girlfriend who I married shortly after and we also bought a place together.

  We could not have afforded to buy a property by ourselves but when we sold we both had a nice deposit for our own places. It all worked out well and we both benefitted. This is an advantage of co-owning, as well as living with people you get along with, which is fun.

  My advice would be to make an agreement that whenever one of you wants to sell (or buy the other out including subsiding the others stamp duty) that you do it. Just talk out each future scenario you can imagine and make sure you are both on the same page.

  People's lives change quickly, especially since you are both in your thirties and may want marriage/children, work/live overseas or just desire to set up your own nests.

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    SkMed on 03/07/2020 - 12:06

    Thanks for the insight :)

    Our friendship could be better described as similar to being siblings (but twins is a whole other level haha). We grew up together, have lived together for several years (and may again if this doesnt pan out), travelled together, and now even work together.

    We are both set on our paths for the forseeable future. Neither of us will be having kids so thats not a worry or concern to us, and we've both done enough travel in our 20's that we're happy to settle and we consider Melbourne + our town in central vic our home etc. It's almost scary how similar our goals are for the next 10-15 years so makes a lot of sense to do this.

    Currently I'm not housesharing for the first time in my adult life, its nice, but I really do miss the social aspect of share houses at this point too. So this seems like a win win.

    We're going to be working towards a sell date when we buy and then we'll have decent depoosits for our own places in the future.

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  panorama on 03/07/2020 - 15:43

  -2

  This is just crazy your partner is defacto and takes half…. The idea with a friend is silly as well

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    SkMed on 03/07/2020 - 23:46

    Lol, huh? So don't buy with a partner or friend is your advice?… So just don't buy? Lol. If you've not noticed buying on a sole income is all but impossible in Melb/Syd. You need to co-own and both work/pay the mortgage in most circumstances but most choose to do so with a spouse/partner. Buying with a friend has the advantage in that they aren't entitled to half your assets if you end the friendship lol. Purchasing with a spouse seems more risky.

    Either way my partner is fine signing an agreement that she's not entitled to the property/asset in the event we split.

    • 

      Niko123456 on 04/07/2020 - 09:22

      I'm not aware of any agreements that would allow this outside of fantasy land. Talk to a solicitor.

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  diceman99 on 04/07/2020 - 00:19

  Get a bigger house so you both have your own spaces

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    SkMed on 04/07/2020 - 08:11

    Yes exactly, this is the whole idea of co-owning. Together we can buy a larger place in a better location which is why we are looking at 3 bedroom places. Without co-owning we would need to sacrifice location or quality/type of dwelling each of us could afford ( likely an apartment or something more rural)

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  Niko123456 on 04/07/2020 - 09:18

  I would be very concerned your partner will end up with 1/3 of the property, particularly if they are "contributing" rent and you are an owner. The concern is a Family Court will see this as a payment of the mortgage.

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    SkMed on 04/07/2020 - 12:42

    -1

    We've come to an agreement that either she pays very little rent for no return in the event we split or when we sell, or she pays more rent and does get a return in the event we split or when we sell. Although whatever return she does get will be minor, only a small percentage which we all agree is fair.

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  duchy on 04/07/2020 - 09:35

  “Danger, Will Robinson!”

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  Mrgreenz on 04/07/2020 - 10:25

  I would be avoiding this scenario personally.

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  bazingaa on 04/07/2020 - 11:10

  Instead of co-ownership, isn't it better to buy a smaller unit for you and your partner?

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    SkMed on 04/07/2020 - 12:47

    If we want to sacrifice quality of life then yes we could. The only thing we could afford on our own is an apartment, but as someone who's grown up rural and rented with decent outdoor spaces I know my mental health wld suffer immensely in an apartment. Apartments also aren't good investments. Also we have a Kelpie and like me isn't suited to an apartment.

    We can't buy too far from inner suburbs as my partner works as a chef in hospo (fine dining) so her employment opportunities are limited to the city/inner suburbs so wouldn't have any way of commuting home late at night if we were to buy further out either.

    Really the only alternative to this is to continue renting but seems silly given I have a deposit.

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  Hangryuman on 04/07/2020 - 12:02

  don't do investments with friends - you tend to lose both …

  at the start of a contract both sides tend to be smiley faces 'what could possibly go wrong'

  at the end of the contract when the s#it hits the fan, both sides tend to study the fine print very carefully - 'what do you mean since I signed this I can't … WTF!?!?!?'

  that said, I bought my first house with a girlfriend who trusted me - she had a few years of hardscrabble savings, I had some inheritance - we bought half share tenants in common I think (over 40 years ago) - about 3 years later we'd long gone our separate ways, she wanted the money, and I bought her out for an amount she was happy with – I think doubled her money in about 3 years. I thank her for starting me on a lifetime of successful property investment I otherwise wouldn't have thought to do. Losing now with COVID but touch wood still ahead.

  So consider the common case where you move elsewhere, the other stays and then decides to stop paying the mortgage, leaving you outraged and offended - and possession is 9/10ths of the law and they are part owners so you can't kick them out - and the best you might hope for is appearing on TV Current Affair - I trusted that nice man in a suit - how come he took all my money !?

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    SkMed on 04/07/2020 - 13:02

    I mean you just highlighted my main point here, couple's/partners split all the time so buying a place with a partner seems much more risky to me. Especially given my partner's career and financial instability, especially now. VS my lifelong friend who has the same goals and has one of the most secure/stable jobs (as do I) for the next 5-10 years (which is the amount of time we plan on co-owning).

    Your anecdote about purchasing and splitting 40 years ago would have far greater consequences today, that wld essentially mean financial ruin for most first home buyers who rely on a dual income. Back then a decent home was much more attainable on a single income by majority of the working class etc.

    It's all but guaranteed neither of us will have a need to move before the 5-10 years are up so this isn't a concern for us.

    Thanks for your thoughts though

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  panorama on 04/07/2020 - 15:18

  We've come to an agreement that either she pays very little rent for no return in the event we split or when we sell

  OH YEAH I give you BS — when it comes to money everyone is in for their chop…. Your nuts even thinking about this…

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    SkMed on 04/07/2020 - 16:21

    Sorry but even if that were true, how would it differ if I were to buy in with my partner rather than my friend? Theoretically I'd be better off purchasing with my friend no?

    I.e. let's assume my friend and I go 50/50. If my partner left and tried to take "half" my stuff then she'd only be entitled to 25percent of the property (half of my half). Where if I were purchasing with my partner and the same thing happened my partner is entitled to 50 percent of the property… Or am I missing something here?