Friday, June 13, 2008

Before You Buy With Your Brother

When I hear people say that buying investment real estate is dangerous or risky it makes me wonder what could have happened to make them feel that way. Sometimes its a sour deal or bad tenants but more often than not it's who they bought the property with.

It's easier to buy a house if you split the down payment with a family member or friend but it's also a great way to ruin a perfectly good relationship. So how do you avoid the troubles that may come in purchasing together?

Excellent legal advice, a clear strategy and a clear separation between the private a business relationship is crucial.

"The most important thing is to do your planning," "A house is something that has an emotional tie to it, yet people want to go out and do things very quickly, especially if a real estate market is booming, and if you dawdle along you're not going to get that house you're after."

"What if one of them dies; what if one of them gets married; what if one of them takes a job transfer and moves out of province? You have to set out in advance what those what-ifs could be and try to document them into a co-ownership agreement. It could be a simple thing like who pays for some of the expenses." Investors Group financial planner Murray Pituley of Regina

IF you shudder at the idea of making a legal document with your brother, mother or friend then imagine what will happen when everything unravels and nobody has a clear idea of what should be happening

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