It occasionally happens that a group of friends or siblings will decide to make an investment together. Different members of the group bring different talents and advantages to the table. One member of the group might have really good credit. Another member of the group may be able to throw in a significant amount of money to make the investment happen. There are actually several good reasons to work together as a group on an investment property.
But there are also some things you have to watch out for. You should really carefully consider all of the factors before deciding to buy an investment property with someone else.
The biggest issue with buying an investment property with a group of individuals is that the property cannot be sold or leveraged for equity without the consent and signature of all owners. That means if you don’t all agree, nothing can be done with the property.
Having joint ownership in an investment property can also be troublesome in the event that one of the owners dies or becomes mentally incapacitated. Without a carefully drawn up contract, it may not be possible to leave your share of the ownership to a beneficiary. The other owners might object to a different owner, even if they are named in a will. This can cause significant complications in probate.
Of course, with all of that said, if you have friends and family who you know you can trust and get along with, it may not be a bad idea to go in together on an investment property. It is really up to your judgement of the people you are investing with.
If you and your family or friends are interested in investment properties, please contact us today.