Positive and negatives of buying a property with a Friend?

Associate
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Hi guys,


Wondering if anyone has any experience with buying a property with a friend? Is it an easy thing to do and what are the benefits and negatives? It would be a buy to let in London for about £550,000. I can see the benefits of all upfront costs which are a lot being halved, but then so is all capital appreciation and rental income in the future. Financially I trust the guy.

Anyone got any experience with this?
 
Soldato
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all negatives and no positives. Money and friendship does not mix. Somethiong will happen down the line and the next thing you know you won't be friends and it will all go pete tong, but now with the added complication of a property in the mix. Don't do it.
 
Soldato
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all negatives and no positives. Money and friendship does not mix. Somethiong will happen down the line and the next thing you know you won't be friends and it will all go pete tong, but now with the added complication of a property in the mix. Don't do it.

Never, I repeat never mix money and friends or family.

No good will come of it.
 
Associate
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My brother-in-law done it with his long time school friend.

All was going well until about 2 years in his friends company he owned was bought out for millions, so he decided to go and buy a house outright - fair enough.

Unfortunately for my brother-in-law he couldn't afford to buy his friend out, so he ended up having to go back into the rental market again.

Personally, I wouldn't do it.
 
Associate
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If it's a buy to let then it's a little different than if you were both planning to live there. It's now just a joint investment and as long as you set everything out in writing (i.e. responsibilities, what happens if one person wants to sell etc) then it should be fine
 
Associate
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Personal experience...dont do it....well actually depends which way you look at it.


My situation:

Bought with a football team mate, i always knew the bloke was a tad odd (he said the house would be kept spotless as he had OCD...wrong OCD...he wanted everything organised shoes etc)...but after we bought a 2 bed, i should have seen the signs when he painted a door shut, wanted to paint around his bed and not the whole wall....left the cooker on numerous times and left the house, left the back door wide open and left the house...oh and left the heating on all through the night on a boiling day and wondered why the next day he had woken up so many times sweating.
Oh and denied the red wine marks on the living room carpet...when i dont drink wine.
He never used to hoover either. (this is key later)

I would say if its not a close friend or a friend you feel it could go either way with (not a life friend)...then do it, but make sure you save on the side if you can.

My scenario ended, when the bloke was rude to my sister (long story but they went on a date or 2...i know, thankfully shes now married to a lovely bloke)...she wasnt interested and this riled the guy...he also used to get drunk on a sunday and come in at stupid o'clock and fall up the stairs.
Well this one sunday he was really p*ssed and my sister came over, he was rude to her (well ignored her)...pulled him up on it...he went off on one...to which i lambasted the idiot. I gave him a few home truths, the best one was he said he always cleaned and hoovered the house...well he couldnt have hoovered as the hoover has been broken for 6mths and id been using my Nans....his face was a picture.

Next thing he wants to sell up....result...i bought his half for the same price we paid for it 2 years previous (3 separate valuations)....2 years later, we made 70k me and my fiancee...so it had its perks.

Blokes actually got a kid now....he couldnt even tie his own laces.
 
Soldato
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Wondering if anyone has any experience with buying a property with a friend?

Not normally a good idea.

It would be a buy to let in London for about £550,000.

In this case, however, you might treat it as a business. Set up a Limited Company so you're both shareholders and the property is owned by the company. This way, if it all goes wrong, there's clear legal separation between you and the property.
 
Soldato
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A negative that springs to mind is your lives will probably take you on different paths, and one of you might want to sell their share. But as its a buy to let its not like you'll both be living there so if one decides to move out the other cant afford to stay.
 
Soldato
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Birmingham
In this case, however, you might treat it as a business. Set up a Limited Company so you're both shareholders and the property is owned by the company. This way, if it all goes wrong, there's clear legal separation between you and the property.

I agree with this. The only way to do it is to treat it as a business and work on an extremely professional level. This may cost money to set up in the first instance, but if they're not willing to go to this level of detail it may not be the correct thing to do.

If everything works out and you end up making money, it'll have huge benefits to have everything wrapped up properly in a company rather than relying on your friendship to make sure everything goes OK.

Buying a house to live in with a friend I think would be very difficult and I wouldn't like to do it!
 
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