Do it with Friends


You want to get in to the property market, you have some savings but not heaps or you don't want to put all your savings in to a property, maybe your income just isn't high enough yet, investing with someone might be the way to go for you.

How to do it?

You'll need a friend or family member. From there it's exactly the same as buying with a spouse except you may want buy as tenants in common instead of joint tenants. That's a discussion for your solicitor.

We have different deposits

No worries. What we do there is create what is called a split for each borrower. We get one loan and create a split for borrower one and a split for borrower two. The splits do not need to be for the same amount. Purchase price is $500,000 and borrower one has $50,000 as a deposit and borrower two has nothing borrower one will have a loan for $200,000 and borrower 2 will be $250,000 plus LMI. 

The benefits

You don't have to try and service a loan with one income, you use both incomes. If you're young and only just starting a career your income generally isn't strong so adding a second person can help. 

You can make your small deposit stretch. Two small deposits can eliminate the need for lenders mortgage insurance and also increases the amount of lenders willing to lend money to you.

With the power of hindsight I believe almost every person would go back 7 years and buy every bit or real estate they could in Sydney and borrow money from anyone they could for the increase in value every house in Sydney saw. If house prices are on the up buying now means money in your pocket. That doesn't mean buy in Sydney but property in other capital cities might be in the midst of a growth cycle you want to catch.

It's not for everyone but if you want to buy property and can't or don't want to do it alone this is a fantastic solution. With a strong strategy in place as to how you will divest ownership down the track this can be a very successful venture.