Entering a Joint Property Venture?

Some people think that they need a lot of money to become a property investor. However, the truth is that there are many ways one could enter the market even with a limited budget. One of these is by going into a joint property venture. What it means is that you are going to partner with one or several people to acquire an investment property. The benefit of this is that it enables everyone to get into the market with a small capital while minimizing their mortgage risk.

However, problems might also arise when getting into a joint property venture. It is therefore important to know how to avoid these. These include:

  1. Getting a written agreement. Regardless of how you trust a person in the partnership, the relationship could go awry once money is taken into the equation. Thus, you need to have a written agreement to outline what are the rights and responsibilities of each partner regarding the property you wish to acquire. Do this before you purchase a property.
  2. Getting professional help. You need the advice of an expert especially if you're new to property investment. Thus, hire a lawyer who could help you with all the legal aspects of the arrangement, including the agreements and contracts you might have to sign. Legal fees might seem expensive, but it is nothing compared to having peace of mind knowing that your rights and interests are protected.
  3. Working with people you know. You need to trust the person you're partnering with in order to make a joint venture work. Whether it is a sibling or a friend, you also need someone who shares the same investment goals as yours. Or if you are going to partner with someone you don't have a prior relationship with, make sure to meet with that individual in person. This would help you ensure whether or not you are on the same page in the venture.
  4. Preparing for the Future. Let's say that you already found your joint venture partner. At this stage, you should also outline what your plans are for the future. The reason for this is that you need to be prepared for instances such as when one of the partners decides to sell his share, and budgeting for the costs of maintaining the property.

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Published on October 10-st, 2012 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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