Would you buy a house with your sibling? The increasingly common way singles are getting on the property ladder
BUYING property has always been a lifelong dream for Kristy, but rather than waiting for a significant other to come along, or trying to slog it out herself, she did what a growing number of Australians are doing and jumped into the real estate market with her sibling.

“My sister and I are very close, we are only three years
apart,” Kristy says. “We’ve backpacked Europe together and shared many ups and
downs. We’re both independent women who have worked hard to put ourselves
through university and save enough money for a deposit while living out of home
since we were 18 years old. We wanted to accomplish this milestone together.”
Kristy and her sister are part of a growing trend, as property gets more
expensive and people marry later, but still want to get on the ladder. Jessica
Darnbrough, national spokeswoman for Mortgage Choice says they’ve seen a 6 per
cent jump in siblings buying together since 2013, making up around 6.5 per cent
of their mortgage holders. She says there are several reasons for this,
including the increase in borrowing capacity with two incomes, as well as being
able to combine savings to come up with a higher deposit, possibly avoiding
expensive mortgage insurance.

Andre and his brother decided to invest together after
they had both been through a divorce and had to sell their properties as part
of the process. “As we both had divorce settlement funds, we decided to combine
that money to allow us to afford a larger house in an inner-city area of
Sydney,” he said. “We have family in this area and did not want to
have to move further out. On our own this wouldn’t have been possible.”
Andre says while the arrangement has been beneficial for the like-minded
brothers, it hasn’t been without some bumps in the road. Bills and expenses
have needed to be managed closely to ensure fairness, as Andre says it has
become messy at times, and renovations or major purchases must be agreed on to
avoid further conflict.

However, the finances aren’t the only decisions that must
be negotiated, and without mum and dad in the house to mediate like they did in
childhood, sometimes sibling consideration for each other goes out the window.
Like when Andre’s brother decided to adopt a large dog without consulting him.
“I am personally uncomfortable with it and it should have been discussed prior
to making this decision.”

He says, however, the biggest challenge is yet to come when
one of the brothers decides to move out and settle down again with a new
partner. “This will be difficult as it will most likely require the sale of the
property in order to make it fair.”

Jessica Darnbrough says it’s important to seek legal advice
and have a co-ownership agreement drawn up to address questions like:
What happens to the property if the relationship sours? What
happens if one party wants to sell or move overseas? Are both
owners going to live in the property? Will rent be paid if just
one owner lives there? Will you get tenants in? Who
will pay the bills? “It really is a cornerstone legal document for
your investment because it will set out roles and responsibilities of each
owner and it will deal with the other important issues,” she explains. “It
forces those buyers to really confront that as well because buying together
there are plenty of benefits — it sounds great, but unless you know what the
other person is thinking and feeling you can run into some troubles.”

Kristy says she and her sister, Jo, sought professional
advice before purchasing a property, which allowed them to discuss and clearly
understand their goals in terms of price and location, as well as their overall
investment strategy, one that they both agree is a long-term goal, with a plan
to buy and hold.

With all of these issues dealt with upfront, the sisters have
found themselves not only able to share the financial burden, but also the
practical and emotional aspects, with Kristy saying she is good with numbers
but struggles to be unemotional with money, while Jo can remain detached and
keep focus.

“Buying an investment property involves a lot of work and
dealings with real estate agents, financial institutions, house inspections and
so on. Having someone to share this responsibility with makes the entire
process less overwhelming. I know some people don’t believe in doing business
with family, but when you’re trying to succeed at something, success is only
fun when you get to share it with your loved ones.”