Investment property blog UK » investing with friends http://www.investment-properties-for-sale.co.uk Investment Properties waiting for Investors, No deposits required. UK Property blog Mon, 06 Sep 2010 14:28:55 +0000 http://wordpress.org/?v=2.8.4 en hourly 1 Pros and Cons of Property Investing With Friends or Family http://www.investment-properties-for-sale.co.uk/2009/10/25/pros-and-cons-of-property-investing-with-friends-or-family/ http://www.investment-properties-for-sale.co.uk/2009/10/25/pros-and-cons-of-property-investing-with-friends-or-family/#comments Sat, 24 Oct 2009 23:26:19 +0000 Rachel http://www.investment-properties-for-sale.co.uk/?p=503 If you want to invest in property, but perhaps can’t afford to make the full financial commitment yet on your own, one option is to invest with friends or family. It’s not an option that appeals to everyone, and can have its ups and down’s, but as long as you’re all clear of what’s involved and where you stand, it can work out successfully. If it’s a choice you’re exploring, then here’s a look at the key pros and cons of choosing to invest in property with friends or family.

The pros of investing with friends or family

* Being able to buy a better property than you could afford on your own. And hopefully making a good profit on it if you decide to sell!
* The extra financial support is good, but it’s also useful to be able to share other expertise too. For example, one of you might have good investing knowledge, whilst the other might have experience with letting properties.
* For first-time property investors, it can be beneficial to be able to share the responsibility, especially with big decisions.
* When things are tough, or you’re having a difficult period with letting the property, it’s good to have someone in the know to talk things through with and brainstorm new ideas with.
* It can help to able to be able to split the tasks between you, rather than one person having to do everything.

 

The cons of investing with friends or family

* Business doesn’t always mix well with friendship or families. It may put an extra strain on your relationship to enter into a business arrangement together.
* Any emotional attachments you have with the other investor can affect your business judgement.
* If they don’t have exactly the same property investing objectives as you from the outset, things could get tricky further down the line.
* Difficulties can occur when one investor wants to sell a property and the other doesn’t (and can’t afford to buy them out).
* Tension can be created if one partner owns a greater share than the other.
* If the other person defaults on payments, or suddenly pulls out of the deal, you’re left in the lurch.
* If anything goes wrong, or the property investing venture doesn’t work out, then you could end up losing a friend as well as a business.

Going into a business partnership like property investing, with a friend or family member, isn’t a decision to be taking lightly. You need to be clear from the outset as to what is expected from each of you, what your views are on managing the property and on long-term expectations. For some people, it can work well; for others, it’s disastrous.

What do you think? Would you go into business and buy a property with a friend or relation?

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