Should You Buy a House with Your Friend?
When you don’t have enough resource to invest
in a property, you consider buying a house with your friend or another person.
Irrespective of your relationship with the person, it is good to agree on the
matters pertaining to property. You can plan in detail how to split the
proceeds in case you get separated. Think in detail how to sort out the
disagreement in case one person is ready for the sale of the property but not
another person.
Entitlement
Entitlement decides who
holds the title. It decides who can sign the documents and the agreements.
Later, property transfer will be based on this criterion of the document. It
also decides how the property will be transferred in case of the death of any
of the owners. Most of the time co-buyers who are not couples, share a
title as tenants in
common or as joint tenants. They also decide the right of survivorship. Creating
an LLC is another option which is advantageous for buying rental or vacation
property jointly with the friend.
Deed of Trust
After your agreement on how to split the proceeds and future sale, your
advocate will draw up a deed of trust having details of agreement and
transactions.
Decide How to Split
Disputes on the property may arise at any time. It may happen that you
or your friend entangle in any financial problem and want to sell the property
henceforth to get instant money as the solution. So, it is pragmatic to split
the value of the house in half. But, it
can't work in a practical sense due to mortgage issue.
Consider Joint Mortgage
You should always take out a joint mortgage with one single monthly
repayment. The practical way is to calculate how much of the monthly mortgage
payment will be paid by both of the friends. Another option is to consider making the unequal payment of the mortgage legally binding. Yet another option is to split the mortgage repayment down the middle.
If you are thinking to invest in a property in Noida, Jaypee
Pavilion Heights could be a
good choice to consider joint mortgages with your friend.
Get Percentage of the Proceeds
If you want to keep a safe side with the future sale of the house, you
should get percentages of the proceeds. Also calculate fairly that how much
percentage you both will have to work out including stamp duty and land tax.
Buy Furniture Separately
Buying just a house is not everything granted that you need to live. You
will also need a house and other appliances. So, consider how to buy the
furniture. The more pragmatic way is to buy all movable items separately. It
will help you get your items when you are selling the house and later, you can
use that item somewhere else. This trick will help you avoid the arguments at
the time of separation of the property.
Keeping in mind the things that can create dispute at the time of
transfer or sale of the property will help in the more advantageous position of
property dealing with your friend.
Comments