1 00:00:10,614 --> 00:00:15,294 Speaker 1: You're listening to a Muma Mea podcast. Mumma Mea acknowledges 2 00:00:15,334 --> 00:00:18,174 Speaker 1: the traditional owners of land and waters that this podcast 3 00:00:18,214 --> 00:00:23,974 Speaker 1: is recorded on Hi. I'm Claire Murphy. This is the 4 00:00:24,014 --> 00:00:27,974 Speaker 1: summer series of Mumma MEA's twice daily news podcast for Quickie. 5 00:00:28,014 --> 00:00:30,654 Speaker 1: In twenty twenty four, we learned that it was the 6 00:00:30,854 --> 00:00:34,494 Speaker 1: toughest time in our country's history for Ozzie's age thirty. 7 00:00:34,654 --> 00:00:36,694 Speaker 2: It is true thirty rolls are going to be less 8 00:00:36,734 --> 00:00:39,934 Speaker 2: well off than their parents are. That's a fact. It's 9 00:00:39,974 --> 00:00:43,294 Speaker 2: a fact that when I was thirty, the house cost 10 00:00:43,374 --> 00:00:47,134 Speaker 2: me three times my salary. Now eight times plus for 11 00:00:47,174 --> 00:00:48,654 Speaker 2: a thirty year old is what it's going to cost 12 00:00:48,694 --> 00:00:50,134 Speaker 2: you to get into the housing market. 13 00:00:50,414 --> 00:00:53,414 Speaker 1: For many Australians, buying property is not even an option, 14 00:00:53,814 --> 00:00:56,374 Speaker 1: especially with the cost of living crisis piled on top. 15 00:00:57,054 --> 00:00:58,694 Speaker 1: What if you went in with a bunch of mates 16 00:00:58,894 --> 00:01:01,174 Speaker 1: and bought something you could all live in together or 17 00:01:01,294 --> 00:01:04,174 Speaker 1: use as an investment property Today we find out what 18 00:01:04,214 --> 00:01:06,094 Speaker 1: we need to know before we go all in with 19 00:01:06,134 --> 00:01:08,974 Speaker 1: our besties in buying a roof to put over our heads. 20 00:01:20,974 --> 00:01:24,094 Speaker 1: In today's competitive housing market, many Aussies are finding it 21 00:01:24,214 --> 00:01:27,214 Speaker 1: increasingly difficult to get a foot on the property ladder. 22 00:01:27,694 --> 00:01:30,774 Speaker 1: With soaring prices in major cities, saving for a deposit 23 00:01:30,814 --> 00:01:34,014 Speaker 1: and securing a mortgage can seem like an insurmountable task 24 00:01:34,094 --> 00:01:37,814 Speaker 1: for individual buyers. However, a growing trend is emerging as 25 00:01:37,854 --> 00:01:43,934 Speaker 1: a potential solution buying property with friends. The concept is simple, 26 00:01:44,254 --> 00:01:47,134 Speaker 1: poor resources with one or more friends to increase buying 27 00:01:47,174 --> 00:01:50,374 Speaker 1: power and share the financial burden. That's what our Muma 28 00:01:50,454 --> 00:01:53,934 Speaker 1: Mere colleague Sean has done. Sean, We've all had a 29 00:01:54,014 --> 00:01:56,254 Speaker 1: loll with our mates about the compound we're all going 30 00:01:56,294 --> 00:01:58,134 Speaker 1: to buy and live in together when we're grown ups 31 00:01:58,214 --> 00:01:58,734 Speaker 1: or retired. 32 00:01:59,094 --> 00:01:59,734 Speaker 3: But how did that. 33 00:01:59,774 --> 00:02:02,094 Speaker 1: Joking around turn into something serious for you and your 34 00:02:02,094 --> 00:02:04,214 Speaker 1: friend to consider actually buying together. 35 00:02:04,734 --> 00:02:07,334 Speaker 4: Yes, it was a bit of a funny conversation. My 36 00:02:07,454 --> 00:02:10,734 Speaker 4: friend was talking about buying a property and was saying, Oh, 37 00:02:10,774 --> 00:02:13,614 Speaker 4: I have this huge deposit, but I don't have the income. 38 00:02:14,334 --> 00:02:17,054 Speaker 4: And I sort of walked away and was sitting in 39 00:02:17,094 --> 00:02:19,374 Speaker 4: a different room just doing some work, and it was 40 00:02:19,414 --> 00:02:21,334 Speaker 4: my girlfriend that came in the door and she said, 41 00:02:21,814 --> 00:02:23,614 Speaker 4: I have an idea and you need to let me 42 00:02:23,654 --> 00:02:25,974 Speaker 4: finish and listen to me, and then we'll talk about it. 43 00:02:26,334 --> 00:02:28,414 Speaker 4: And she came up with this idea of buying a 44 00:02:28,414 --> 00:02:32,614 Speaker 4: property with my friend. Because I had the income but 45 00:02:32,774 --> 00:02:35,374 Speaker 4: not the whole deposit. She's got the deposit for not 46 00:02:35,454 --> 00:02:38,174 Speaker 4: the income, and they said, if we got half and half, 47 00:02:38,254 --> 00:02:41,454 Speaker 4: we could buy this place together. My friend would move 48 00:02:41,574 --> 00:02:45,294 Speaker 4: into it and live with her mum and her current housemate, 49 00:02:45,694 --> 00:02:47,854 Speaker 4: so the rent would be covered, and then we would. 50 00:02:47,654 --> 00:02:50,614 Speaker 5: Just split the end sort of costs. 51 00:02:50,654 --> 00:02:54,134 Speaker 4: And I sort of went, well, logistically, that kind of 52 00:02:54,134 --> 00:02:57,694 Speaker 4: gets both of our feet in the door to buying property. 53 00:02:57,774 --> 00:03:00,014 Speaker 4: But then I sort of freaked own and go, well, 54 00:03:00,094 --> 00:03:02,654 Speaker 4: how's it going to work? We're friends, Like, this is 55 00:03:02,694 --> 00:03:03,654 Speaker 4: a huge decision. 56 00:03:04,134 --> 00:03:07,294 Speaker 1: So talk me through where it went from there, because 57 00:03:07,294 --> 00:03:09,494 Speaker 1: obviously you have to really get into the nitty grip 58 00:03:09,734 --> 00:03:12,854 Speaker 1: of finances and signing contracts and making sure that everything 59 00:03:12,974 --> 00:03:15,574 Speaker 1: is split correctly, and then there's a lot of what 60 00:03:15,694 --> 00:03:18,174 Speaker 1: ifs that you have to take into consideration. So how 61 00:03:18,214 --> 00:03:20,334 Speaker 1: did you have those really tough discussions? 62 00:03:21,094 --> 00:03:23,454 Speaker 4: Yeah, So, once I think the hype of oh my god, 63 00:03:23,534 --> 00:03:25,934 Speaker 4: we're going to buy a house together kind of wore off. 64 00:03:25,974 --> 00:03:28,254 Speaker 5: It was like, Okay, how are we going to do this? 65 00:03:28,534 --> 00:03:32,014 Speaker 4: And so we found a broker together someone that my 66 00:03:32,054 --> 00:03:36,694 Speaker 4: partner used previously, and we really had to lay on 67 00:03:36,734 --> 00:03:39,094 Speaker 4: the table, you know, what we earn and what we had, 68 00:03:39,174 --> 00:03:41,934 Speaker 4: and be really honest about our finances, which you know, 69 00:03:42,014 --> 00:03:44,494 Speaker 4: is not something you usually do with your friends. But 70 00:03:44,614 --> 00:03:48,294 Speaker 4: it was really eye opening and it was a fantastic experience. 71 00:03:49,134 --> 00:03:52,774 Speaker 4: And then it was about deciding, so how much would 72 00:03:52,774 --> 00:03:55,734 Speaker 4: we be able to borrow how much do we want 73 00:03:55,774 --> 00:03:58,774 Speaker 4: to spend? Also, as I said, they would be living 74 00:03:58,774 --> 00:04:00,454 Speaker 4: in the house, So how much am I going to 75 00:04:00,534 --> 00:04:03,894 Speaker 4: charge these people rent? What is fair because you know, 76 00:04:04,014 --> 00:04:07,054 Speaker 4: I care about them, but also fair that I'm also 77 00:04:07,094 --> 00:04:11,134 Speaker 4: not letting people live in my home rent free and 78 00:04:11,174 --> 00:04:13,574 Speaker 4: I'm having to cover the costs of it. So we 79 00:04:13,654 --> 00:04:18,534 Speaker 4: had to be really open and honest about what we 80 00:04:18,534 --> 00:04:20,534 Speaker 4: were willing to put in and. 81 00:04:20,774 --> 00:04:22,334 Speaker 5: Sort of where our boundaries were. 82 00:04:22,934 --> 00:04:25,574 Speaker 4: And this also is a friend that I'm not super 83 00:04:25,614 --> 00:04:28,734 Speaker 4: super super close with, so we were able to make 84 00:04:28,774 --> 00:04:31,534 Speaker 4: an agreement that we would have our friendship and then 85 00:04:31,574 --> 00:04:34,094 Speaker 4: we would have our business partnership in a way, and 86 00:04:34,174 --> 00:04:38,774 Speaker 4: that the payments for this home would be specifically business 87 00:04:38,774 --> 00:04:40,934 Speaker 4: and we would stay to that. So, yeah, it was 88 00:04:40,974 --> 00:04:42,654 Speaker 4: a bit of a tough way to navigate, but I 89 00:04:42,654 --> 00:04:45,254 Speaker 4: think We did it really well and very maturely. 90 00:04:45,614 --> 00:04:47,134 Speaker 1: So have you actually bought the property? 91 00:04:47,334 --> 00:04:48,614 Speaker 5: No, not yet. 92 00:04:49,054 --> 00:04:51,974 Speaker 4: We have done all the paperwork, which I felt like 93 00:04:52,014 --> 00:04:54,614 Speaker 4: I had to sell a kidney to do. It was 94 00:04:54,654 --> 00:04:57,774 Speaker 4: also really hard because at times I was busy in traveling, 95 00:04:58,134 --> 00:04:59,854 Speaker 4: then she was busy in traveling, and you're kind of 96 00:04:59,854 --> 00:05:01,454 Speaker 4: sitting on the other and going, I kind of want 97 00:05:01,454 --> 00:05:03,974 Speaker 4: this person to hurry up because I need them and 98 00:05:04,614 --> 00:05:06,254 Speaker 4: they need to kind of stop messing about and put 99 00:05:06,334 --> 00:05:08,374 Speaker 4: in this paperwork. But you can't say that because they're 100 00:05:08,414 --> 00:05:11,934 Speaker 4: your friend and care about them. But yeah, it was 101 00:05:11,934 --> 00:05:14,134 Speaker 4: just about being patient. So we've got the deposit and 102 00:05:14,134 --> 00:05:15,654 Speaker 4: now we're currently looking for a home. 103 00:05:16,334 --> 00:05:16,494 Speaker 5: Now. 104 00:05:16,534 --> 00:05:18,934 Speaker 4: My challenge is finding a home that we can afford 105 00:05:19,494 --> 00:05:22,614 Speaker 4: and also one that she likes because she's living in it. 106 00:05:23,134 --> 00:05:25,814 Speaker 5: So this process is taking a lot. 107 00:05:25,654 --> 00:05:28,534 Speaker 4: Longer than I thought, and unfortunately the gap is closing 108 00:05:28,614 --> 00:05:30,534 Speaker 4: for us to hurry up and do that. 109 00:05:30,574 --> 00:05:32,774 Speaker 5: If not, we'll have to start the process again next year. 110 00:05:33,494 --> 00:05:36,934 Speaker 4: But I'm just trying to be patient and kind as 111 00:05:37,054 --> 00:05:39,134 Speaker 4: much as I can where I can. 112 00:05:39,734 --> 00:05:43,614 Speaker 1: What measures have you put in plation if say, something 113 00:05:43,734 --> 00:05:47,854 Speaker 1: does go wrong and maybe it souurs your friendship maybe 114 00:05:48,054 --> 00:05:50,774 Speaker 1: they decide they want to sell or you don't, or 115 00:05:50,854 --> 00:05:52,574 Speaker 1: vice versa. Have you got a lot of those kind 116 00:05:52,574 --> 00:05:54,414 Speaker 1: of clauses in place to protect each other. 117 00:05:55,134 --> 00:05:58,854 Speaker 4: Absolutely, This was something that we had verbal agreements about. 118 00:05:58,654 --> 00:06:01,334 Speaker 5: Before and is now being written into our. 119 00:06:01,334 --> 00:06:05,374 Speaker 4: Contract that if someone backs out and doesn't want to 120 00:06:05,374 --> 00:06:07,494 Speaker 4: do it anymore, they have the right to do that. 121 00:06:07,974 --> 00:06:10,294 Speaker 4: If we buy the property and they want to leave, 122 00:06:10,534 --> 00:06:13,774 Speaker 4: the other person would buy them out, or we would 123 00:06:13,814 --> 00:06:15,054 Speaker 4: sell the property together. 124 00:06:15,254 --> 00:06:17,694 Speaker 5: If the other person didn't have the money to cover. 125 00:06:17,574 --> 00:06:22,014 Speaker 4: That that any changes to the home being made would 126 00:06:22,094 --> 00:06:26,454 Speaker 4: have to come through the other person first, and it 127 00:06:26,454 --> 00:06:29,094 Speaker 4: would have to come down to an agreement. And you know, 128 00:06:29,134 --> 00:06:31,814 Speaker 4: if the other person didn't agree, it would you know, 129 00:06:31,894 --> 00:06:34,374 Speaker 4: we just have to keep that line of communication open 130 00:06:34,374 --> 00:06:36,974 Speaker 4: and be respectful about finance and choice. 131 00:06:37,534 --> 00:06:39,814 Speaker 1: What do you think has been the best part of 132 00:06:39,854 --> 00:06:42,294 Speaker 1: this process for you? Is it just the fact that 133 00:06:42,334 --> 00:06:44,774 Speaker 1: you are able to get into the property market, whereas 134 00:06:44,774 --> 00:06:46,174 Speaker 1: before you might not have been able to. 135 00:06:46,534 --> 00:06:51,054 Speaker 4: Absolutely, you know, I'm very much in that almost gen 136 00:06:51,174 --> 00:06:53,734 Speaker 4: Z kind of mentality of going I will never own 137 00:06:53,774 --> 00:06:56,854 Speaker 4: a home. This is never going to happen in my lifetime. 138 00:06:57,454 --> 00:07:00,254 Speaker 4: And to have this opportunity almost felt like this golden ticket. 139 00:07:00,454 --> 00:07:03,254 Speaker 4: It was like someone was saying, you can get in 140 00:07:03,334 --> 00:07:05,214 Speaker 4: the market, you can get your foot in the door, 141 00:07:05,774 --> 00:07:08,014 Speaker 4: and it's okay to ask for that little bit of help. 142 00:07:08,014 --> 00:07:09,894 Speaker 4: And that's what I had to do and she had 143 00:07:09,934 --> 00:07:12,574 Speaker 4: to do, was go, maybe we could help each other out. Yes, 144 00:07:12,614 --> 00:07:14,934 Speaker 4: we're not going to be as well off as someone 145 00:07:14,974 --> 00:07:17,934 Speaker 4: if they went in on their own, but if this 146 00:07:18,294 --> 00:07:20,414 Speaker 4: means that we can get this sort of ball rolling 147 00:07:20,454 --> 00:07:23,174 Speaker 4: and started, we both felt really privileged to be able 148 00:07:23,214 --> 00:07:25,894 Speaker 4: to do that for ourselves and for each other. 149 00:07:26,734 --> 00:07:28,814 Speaker 1: Does it feel strange though, that you won't be living 150 00:07:28,814 --> 00:07:29,614 Speaker 1: in your own home? 151 00:07:31,534 --> 00:07:32,614 Speaker 5: Yes, and no. 152 00:07:32,774 --> 00:07:37,174 Speaker 4: I think then, you know, buying an investment property regardless 153 00:07:37,814 --> 00:07:41,694 Speaker 4: is sort of the being detached from having this asset 154 00:07:42,014 --> 00:07:44,494 Speaker 4: that you don't really get to touch or enjoy, And 155 00:07:44,534 --> 00:07:46,974 Speaker 4: it is a bit strange to go, oh, I'm paying 156 00:07:47,054 --> 00:07:50,654 Speaker 4: money pretty much into the ether for something that I 157 00:07:50,734 --> 00:07:52,134 Speaker 4: hope is going to help me one day. 158 00:07:52,734 --> 00:07:54,614 Speaker 5: But seeing her being able to live. 159 00:07:54,454 --> 00:07:57,414 Speaker 4: In it, I think I'll be able to enjoy it 160 00:07:57,654 --> 00:08:00,454 Speaker 4: by proxy rather than having somebody that I don't know 161 00:08:00,534 --> 00:08:01,774 Speaker 4: living in my rental property. 162 00:08:02,174 --> 00:08:04,134 Speaker 1: Well, with the experience that you've had so far in 163 00:08:04,174 --> 00:08:06,774 Speaker 1: filling out that mountain of paperwork and getting through all 164 00:08:06,774 --> 00:08:09,294 Speaker 1: of the hurdles that come with buying property with friends. 165 00:08:09,534 --> 00:08:11,534 Speaker 1: What advice would you have for someone who's my maybe 166 00:08:11,534 --> 00:08:12,574 Speaker 1: thinking about it right now. 167 00:08:13,854 --> 00:08:16,254 Speaker 5: I would say communication is key. 168 00:08:16,294 --> 00:08:18,574 Speaker 4: First off, you have to be really clear and open 169 00:08:18,614 --> 00:08:21,294 Speaker 4: about what you want, what you're willing to put into it, 170 00:08:22,014 --> 00:08:24,574 Speaker 4: and you know, having that respect that the other person 171 00:08:24,654 --> 00:08:27,134 Speaker 4: might not agree. And then I would say, with the 172 00:08:27,174 --> 00:08:30,054 Speaker 4: mountain of paperwork, take it one step at a time. 173 00:08:30,574 --> 00:08:33,214 Speaker 5: Get a mortgage broker that will explain everything to you, 174 00:08:33,374 --> 00:08:34,934 Speaker 5: even if you feel like an idiot. 175 00:08:35,414 --> 00:08:38,134 Speaker 4: They will have the patience and kindness to take you 176 00:08:38,174 --> 00:08:41,054 Speaker 4: through each step. Don't look at the whole picture, just 177 00:08:41,094 --> 00:08:43,614 Speaker 4: do one little thing at a time. You'll eventually get 178 00:08:43,654 --> 00:08:44,214 Speaker 4: there in the end. 179 00:08:47,334 --> 00:08:50,814 Speaker 1: This approach can make home ownership more attainable, especially in 180 00:08:50,854 --> 00:08:54,694 Speaker 1: desirable areas where prices of skyrocketed. But while buying with 181 00:08:54,734 --> 00:08:58,174 Speaker 1: friends off as exciting possibilities, it also comes with unique 182 00:08:58,214 --> 00:09:02,694 Speaker 1: challenges that require careful consideration. The most obvious advantage of 183 00:09:02,734 --> 00:09:07,014 Speaker 1: purchasing property with friends is your increased financial capacity. By 184 00:09:07,054 --> 00:09:10,294 Speaker 1: combining savings for a deposit and sharing more you drew payments, 185 00:09:10,334 --> 00:09:13,494 Speaker 1: you can potentially afford a more expensive property or buying 186 00:09:13,534 --> 00:09:16,454 Speaker 1: a better location than you could on your own. This 187 00:09:16,534 --> 00:09:19,614 Speaker 1: can be particularly appealing in cities like Sydney and Melbourne, 188 00:09:19,694 --> 00:09:23,174 Speaker 1: where median house prices have reached eye watering levels, although 189 00:09:23,174 --> 00:09:25,134 Speaker 1: they have showed signs of slowing in the back half 190 00:09:25,174 --> 00:09:28,534 Speaker 1: of twenty twenty four. Another benefit is the ability to 191 00:09:28,574 --> 00:09:33,174 Speaker 1: share ongoing costs like maintenance, insurance, counsel rates, and property taxes, 192 00:09:33,494 --> 00:09:37,094 Speaker 1: making home ownership more manageable, especially for first time buyers. 193 00:09:37,974 --> 00:09:40,454 Speaker 1: But while buying with friends can be an attractive option, 194 00:09:40,734 --> 00:09:47,054 Speaker 1: it's crucial to understand the legal and financial implications. Amanda 195 00:09:47,094 --> 00:09:49,454 Speaker 1: Farmer is a strata lawyer. She has joined us on 196 00:09:49,494 --> 00:09:52,014 Speaker 1: a previous episode of The Quickie discussing everything you need 197 00:09:52,054 --> 00:09:54,974 Speaker 1: to know before you buy an apartment. Amanda, We've just 198 00:09:55,014 --> 00:09:57,494 Speaker 1: spoken to a work colleague who overheard us in the 199 00:09:57,534 --> 00:09:59,454 Speaker 1: office talking about this story and said that she was 200 00:09:59,494 --> 00:10:01,934 Speaker 1: doing it, and you've had exactly the same experience. 201 00:10:02,214 --> 00:10:02,894 Speaker 3: Absolutely. 202 00:10:03,094 --> 00:10:06,094 Speaker 6: I was having dinner with a friend just last night 203 00:10:06,294 --> 00:10:08,854 Speaker 6: and this topic came up and she said, yeah, I 204 00:10:08,934 --> 00:10:09,734 Speaker 6: do that too. 205 00:10:10,094 --> 00:10:11,494 Speaker 3: It's out there, it's happening. 206 00:10:11,334 --> 00:10:13,614 Speaker 1: So it's probably a little bit more prevalent than what 207 00:10:13,654 --> 00:10:15,254 Speaker 1: we think. Do you think we're going to be seeing 208 00:10:15,294 --> 00:10:17,414 Speaker 1: more of this people buying with friends instead of the 209 00:10:17,454 --> 00:10:19,854 Speaker 1: traditional with your romantic partner. 210 00:10:20,214 --> 00:10:22,334 Speaker 3: Yeah, I think we absolutely are. 211 00:10:22,694 --> 00:10:25,774 Speaker 6: You know, affordability it's really tough at the moment, and 212 00:10:25,894 --> 00:10:30,254 Speaker 6: pooling your resources just makes it easier, makes it faster 213 00:10:30,494 --> 00:10:35,134 Speaker 6: to get into the property market, and sharing those expenses 214 00:10:35,494 --> 00:10:37,094 Speaker 6: is going to be really handy. 215 00:10:37,414 --> 00:10:39,654 Speaker 1: I guess we need to set the groundwork pretty early 216 00:10:39,694 --> 00:10:42,054 Speaker 1: on with this, because I think many of us have 217 00:10:42,054 --> 00:10:45,174 Speaker 1: had conversations with our friends about buying homes together, or 218 00:10:45,534 --> 00:10:46,494 Speaker 1: you know, some of us have a bit of a 219 00:10:46,574 --> 00:10:49,294 Speaker 1: laugh about buying a compound that we'll all live on 220 00:10:49,534 --> 00:10:53,534 Speaker 1: in retirement. But at what stage when things start to 221 00:10:53,534 --> 00:10:56,334 Speaker 1: get serious in this discussion about buying property with friends, 222 00:10:56,334 --> 00:10:58,694 Speaker 1: do you need to really sit down and say, Okay, 223 00:10:59,534 --> 00:11:01,134 Speaker 1: what do we need to be aware of before we 224 00:11:01,174 --> 00:11:02,094 Speaker 1: start making moves. 225 00:11:02,534 --> 00:11:05,214 Speaker 6: Oh, look, as early as possible, I say, because it 226 00:11:05,294 --> 00:11:09,414 Speaker 6: really comes down to going into this with the right people. 227 00:11:09,654 --> 00:11:12,774 Speaker 6: Choosing the right people to buy with is absolutely critical 228 00:11:12,774 --> 00:11:15,254 Speaker 6: and if you get that wrong you can be in 229 00:11:15,294 --> 00:11:17,614 Speaker 6: a world of pain. You want to make sure that 230 00:11:17,654 --> 00:11:19,854 Speaker 6: you are buying property with people who have the same 231 00:11:19,974 --> 00:11:22,054 Speaker 6: goals as you most importantly, and. 232 00:11:22,094 --> 00:11:24,014 Speaker 3: We're going to live in this property. 233 00:11:24,054 --> 00:11:27,134 Speaker 6: Is this going to be the idyllic compound that we 234 00:11:27,174 --> 00:11:29,774 Speaker 6: want or is this an investment for us? So making 235 00:11:29,814 --> 00:11:31,494 Speaker 6: sure that you're on the same page about that, and 236 00:11:31,534 --> 00:11:34,094 Speaker 6: I think that starts right up when you're thinking about 237 00:11:34,414 --> 00:11:37,734 Speaker 6: who might be good property partners for me, that's the 238 00:11:37,814 --> 00:11:39,334 Speaker 6: number one thing to be thinking about. 239 00:11:39,654 --> 00:11:39,814 Speaker 5: Now. 240 00:11:39,814 --> 00:11:41,974 Speaker 1: Obviously there's going to be a lot of sharing of 241 00:11:42,014 --> 00:11:44,294 Speaker 1: information amongst friends. We're going to be looking deep in 242 00:11:44,334 --> 00:11:47,814 Speaker 1: each other's finances, which is something that makes people very uncomfortable. 243 00:11:48,214 --> 00:11:50,334 Speaker 1: And then obviously there's going to be things we need 244 00:11:50,334 --> 00:11:53,494 Speaker 1: to put in place before we ever start looking up 245 00:11:53,494 --> 00:11:56,334 Speaker 1: real estate ads online and going out to open inspections. 246 00:11:57,414 --> 00:12:00,454 Speaker 1: When does a contract become a contract? And how do 247 00:12:00,534 --> 00:12:03,414 Speaker 1: you actually write a contract so that the both of 248 00:12:03,454 --> 00:12:05,254 Speaker 1: you are on the same page and are protected. 249 00:12:05,774 --> 00:12:06,014 Speaker 5: Yeah. 250 00:12:06,054 --> 00:12:08,174 Speaker 6: So the types of contracts that we're talking about with 251 00:12:08,214 --> 00:12:12,134 Speaker 6: these derangements are often called co ownership agreements, or they 252 00:12:12,214 --> 00:12:16,294 Speaker 6: might be called property partnership agreements, and they're reasonably common. 253 00:12:16,654 --> 00:12:18,574 Speaker 6: It's the kind of thing that i'd suggest you'd start 254 00:12:18,894 --> 00:12:22,494 Speaker 6: talking to a lawyer or a property lawyer about pretty early 255 00:12:22,534 --> 00:12:25,134 Speaker 6: on in the piece, just to understand the kinds of 256 00:12:25,174 --> 00:12:27,174 Speaker 6: things that need to be covered. 257 00:12:27,854 --> 00:12:30,454 Speaker 3: What shares are we going to own the property innit? 258 00:12:30,614 --> 00:12:32,374 Speaker 6: Is this going to be equal shares or is someone 259 00:12:32,454 --> 00:12:34,814 Speaker 6: going to put in more money and therefore have more 260 00:12:34,814 --> 00:12:37,814 Speaker 6: of a share. How we're going to manage the maintenance 261 00:12:37,974 --> 00:12:41,054 Speaker 6: and how we're going to share the expenses for this property. 262 00:12:41,534 --> 00:12:43,254 Speaker 6: What are we going to do with the rental income 263 00:12:43,574 --> 00:12:46,654 Speaker 6: if it is an investment. Are we going to have 264 00:12:46,734 --> 00:12:50,534 Speaker 6: different rights to use the property? What about if somebody 265 00:12:50,774 --> 00:12:54,454 Speaker 6: gets married, or somebody doesn't want to own the property anymore, 266 00:12:54,534 --> 00:12:56,854 Speaker 6: or wants to have kids. How do we deal with 267 00:12:56,894 --> 00:12:58,574 Speaker 6: all of that? All of that goes into a co 268 00:12:58,654 --> 00:13:01,414 Speaker 6: ownership agreement, And if you're thinking about that early on, 269 00:13:01,494 --> 00:13:03,894 Speaker 6: then you can be talking about this with your friends 270 00:13:03,934 --> 00:13:06,014 Speaker 6: and talking about how you're going to handle these issues. 271 00:13:06,334 --> 00:13:08,374 Speaker 6: But there are templates out there, and if you have 272 00:13:08,414 --> 00:13:10,934 Speaker 6: a quick Google, you'll find some ideas. 273 00:13:11,294 --> 00:13:13,454 Speaker 3: You can give it a go, put it together yourself. 274 00:13:13,454 --> 00:13:15,974 Speaker 6: If you wanted to get it looked over, that's probably 275 00:13:16,294 --> 00:13:19,814 Speaker 6: a good option, But the DIY option is definitely there. 276 00:13:20,534 --> 00:13:22,254 Speaker 1: I guess the thing that a lot of people are 277 00:13:22,254 --> 00:13:24,654 Speaker 1: worried about, and I mean we should be equally as 278 00:13:24,654 --> 00:13:27,094 Speaker 1: worried about this if we go into buying property with 279 00:13:27,134 --> 00:13:30,654 Speaker 1: our romantic binder, because you know, marriages and relationships fail 280 00:13:31,054 --> 00:13:33,414 Speaker 1: and you have to deal with splitting up whatever it 281 00:13:33,494 --> 00:13:35,694 Speaker 1: is you've created together. But in some instances, like we 282 00:13:35,774 --> 00:13:38,254 Speaker 1: heard from Sean earlier who said that she's not living 283 00:13:38,254 --> 00:13:40,294 Speaker 1: in the property with her friend. Her friend is living there, 284 00:13:40,494 --> 00:13:43,134 Speaker 1: but it's her investment property and they co own it together. 285 00:13:44,214 --> 00:13:46,774 Speaker 1: So there has to, I guess, be things in place 286 00:13:46,854 --> 00:13:50,614 Speaker 1: for if say the friendship sours, or if one person 287 00:13:50,734 --> 00:13:53,174 Speaker 1: decides they no longer want to be a co owner, 288 00:13:53,174 --> 00:13:55,254 Speaker 1: they want to be a full owner. So there, I 289 00:13:55,254 --> 00:13:57,174 Speaker 1: guess has to be a lot of things in place 290 00:13:57,734 --> 00:14:00,094 Speaker 1: for if things go wrong, and what other things could 291 00:14:00,174 --> 00:14:01,134 Speaker 1: potentially go wrong. 292 00:14:01,254 --> 00:14:04,654 Speaker 6: This is definitely where your contract, your co ownership agreement 293 00:14:04,734 --> 00:14:09,014 Speaker 6: comes to the fore. It should really focus on the end. 294 00:14:09,294 --> 00:14:11,454 Speaker 6: You prepare for the divorce, even though you're going into 295 00:14:11,494 --> 00:14:14,134 Speaker 6: the happy marriage. You prepare for the divorce. It will 296 00:14:14,134 --> 00:14:17,054 Speaker 6: have provisions in it for what happens if people want 297 00:14:17,094 --> 00:14:17,574 Speaker 6: to get out. 298 00:14:17,854 --> 00:14:21,134 Speaker 3: Maybe one owner should have the first right to purchase 299 00:14:21,334 --> 00:14:23,134 Speaker 3: the other owner's shares. 300 00:14:24,014 --> 00:14:27,494 Speaker 6: A really important issue to cover is the money, the 301 00:14:27,534 --> 00:14:30,854 Speaker 6: financing and the debt. What if somebody can't make their 302 00:14:30,894 --> 00:14:34,614 Speaker 6: mortgage repayments. What most people don't understand is that when 303 00:14:34,614 --> 00:14:37,334 Speaker 6: you get a loan for these properties, you are actually 304 00:14:37,374 --> 00:14:41,334 Speaker 6: liable for the full debt, not just your share, and 305 00:14:41,334 --> 00:14:45,094 Speaker 6: that can affect your future borrowing capacity. So if somebody 306 00:14:45,254 --> 00:14:47,334 Speaker 6: wants to get out because they want to buy another property, 307 00:14:47,454 --> 00:14:50,134 Speaker 6: then your co ownership agreement should deal with that. If 308 00:14:50,134 --> 00:14:52,494 Speaker 6: you don't have these agreements in place or they're not clear, 309 00:14:53,174 --> 00:14:56,294 Speaker 6: you can end up in expensive court proceedings trying to 310 00:14:56,334 --> 00:14:57,454 Speaker 6: sort these things out. 311 00:14:57,694 --> 00:14:59,734 Speaker 1: Can we look at these from a real positive angle, 312 00:14:59,814 --> 00:15:02,694 Speaker 1: like people are coming together and making decisions that are 313 00:15:02,694 --> 00:15:05,694 Speaker 1: going to help them financially, and for many it'll be 314 00:15:05,694 --> 00:15:08,174 Speaker 1: breaking into a market that maybe they would not have 315 00:15:08,254 --> 00:15:10,734 Speaker 1: had the opportunity to do so had they gone into 316 00:15:10,774 --> 00:15:15,094 Speaker 1: this solo. Do you think that buying property with friends 317 00:15:15,254 --> 00:15:17,014 Speaker 1: is actually a good idea. 318 00:15:17,094 --> 00:15:19,454 Speaker 3: I think it definitely can be a good idea. I 319 00:15:19,534 --> 00:15:20,654 Speaker 3: have seen it at work. 320 00:15:20,734 --> 00:15:24,294 Speaker 6: I've certainly heard of people who are doing this successfully, 321 00:15:24,974 --> 00:15:27,494 Speaker 6: both from the perspective of being able to buy a 322 00:15:27,494 --> 00:15:30,134 Speaker 6: better quality property in an area you might want to 323 00:15:30,174 --> 00:15:33,414 Speaker 6: live in, perhaps a larger property and also from the 324 00:15:33,454 --> 00:15:36,734 Speaker 6: investment perspective, I've been hearing from a few people that 325 00:15:36,774 --> 00:15:39,574 Speaker 6: they're buying property together so that they can buy numerous 326 00:15:39,694 --> 00:15:43,214 Speaker 6: properties and start getting that rental income and enjoying those 327 00:15:43,254 --> 00:15:44,614 Speaker 6: capital gains all a. 328 00:15:44,574 --> 00:15:47,734 Speaker 3: Little bit faster. So it definitely works. If you can 329 00:15:47,774 --> 00:15:49,094 Speaker 3: get in there with the right. 330 00:15:48,974 --> 00:15:52,654 Speaker 6: People, your goals are aligned, and you've protected yourself with 331 00:15:52,774 --> 00:15:56,134 Speaker 6: a good, clear agreement, then I think it's a great. 332 00:15:55,974 --> 00:15:56,374 Speaker 5: Way to go. 333 00:16:00,254 --> 00:16:03,454 Speaker 1: As Amanda mentioned, buying property with friends isn't without risk. 334 00:16:03,694 --> 00:16:07,374 Speaker 1: Relationships can change over time, and so can financial circumstances, 335 00:16:07,654 --> 00:16:10,254 Speaker 1: and you'll need to figure out what happens say one 336 00:16:10,334 --> 00:16:12,854 Speaker 1: of you loses your job and can't make mortgage of payments, 337 00:16:13,014 --> 00:16:14,534 Speaker 1: or if one of you wants to sell but the 338 00:16:14,574 --> 00:16:18,614 Speaker 1: others don't. These scenarios can lead to tension and potentially 339 00:16:18,814 --> 00:16:22,334 Speaker 1: legal disputes, and in some cases friends have been forced 340 00:16:22,374 --> 00:16:25,654 Speaker 1: to sell properties at a loss due to irreconcilable differences 341 00:16:25,814 --> 00:16:30,014 Speaker 1: or change life circumstances. With twenty twenty five shaping up 342 00:16:30,014 --> 00:16:32,534 Speaker 1: to be a buyer's market, well at least until those 343 00:16:32,574 --> 00:16:35,574 Speaker 1: promised interest rate cuts come along, now might be the 344 00:16:35,614 --> 00:16:39,374 Speaker 1: time to consider pulling those resources so get your contracts tight, 345 00:16:39,614 --> 00:16:42,694 Speaker 1: be clear and transparent with your fellow house buying bunch, 346 00:16:43,094 --> 00:16:45,814 Speaker 1: and maybe twenty twenty five could be the year you 347 00:16:45,854 --> 00:16:48,694 Speaker 1: get into the property market. Thanks for taking the time 348 00:16:48,694 --> 00:16:50,934 Speaker 1: to feed your mind with us today. The quickie is 349 00:16:50,974 --> 00:16:54,254 Speaker 1: produced by me Claire Murphy our senior producer Taylor Strano, 350 00:16:54,494 --> 00:16:56,374 Speaker 1: with audio production by Tom Lyin.