Investing With Others

Let’s face it: real estate investment has never felt more out-of-reach for ordinary Australians than it does now. With surging property prices working out well for existing investors, it’s getting harder and harder for new investors.

But does that mean property investment is impossible? Nope, far from it! It just means that investors need to think outside the box when it comes to securing their first investment property.

For some investors, one of the best ways to achieve this is to invest with others, like family members or close friends. This lowers the financial barrier for entering the property market, and allows people to get their foot in the door.

In this post, Patrick Leo outlines the pros and cons of investing with others, the considerations needed, and how we can help you, your family members, your friends or even your neighbours on your journey to property investment.

The benefits of investing with others
There are some serious potential benefits of investing with other people, such as family or friends. The main pros include:

• Increased borrowing power
  By buying a property with others, you’re combining incomes for an increased borrowing power, allowing you to get your hands on a better quality property. This expands the options for keen investors, giving them more choice.
   

• Lighter financial burden
  Paying off a property on one income may be a large financial burden, putting you under more economic constraints and increasing stress. But having one or more additional incomes to pay off the property makes things much, much easier and less financially burdensome.
   

• Move quicker
  Getting approved for mortgages can take a long time on your own. But with combined incomes, the process is often much quicker, as you’re seen as less risky. This can allow you to strike fast when a highly desirable property hits the market.

Disadvantages of investing with others

Of course, there are some potential cons of investing with others that you should be mindful of:

• Strain on relationships
  Property investing isn’t easy, and it’s likely you won’t agree on all aspects of the management of the property – especially when it comes to tenant selection, renovations and maintenance. This creates a need for compromise, and can put strain on relationships between investors when that compromise isn’t being facilitated.
   

• Selling the property
  If one investor needs to sell their share of the property, this can create complications. All owners have a share in the property, and they must decide whether to sell the whole property, or find another investor to take on the seller’s share. If an agreement can’t be made, this often results in going to court.

But one of the key mistakes shared investors make when buying a property together is failing to consult an expert team like Patrick Leo. We’ve worked with countless investors in your position who are looking to invest with others. Patrick Leo can find the right property for all investors’ needs and address potential issues before the purchase. Get in touch with the team at Patrick Leo to start your shared investment today.