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INVESTING WITH A PARTNER

INVESTING WITH A PARTNER

Investing with a Partner 


Whether it is your first purchase or one of many, investing with a partner can be a viable way to afford a purchase, especially in today’s market. 


You share the costs involved based on your percentage of investment. 


You may qualify for a higher mortgage based on combined income, allowing you more purchasing power. 


Ownership does not have to be a 50/50 split, the percentage can be what is agreed upon.


The purchase could also potentially involve more than two people.  


There are different ways to hold title, you may want to consider a limited partnership, specific to the property being purchased. 


Another option, other than holding title in your personal name, is to incorporate a company that would take title to the property.  


Documenting in writing by way of an Agreement what the ownership responsibilities will be, and how expenses and profits are shared is very importance.  Avoids any possible misunderstanding now and at a future date. 


In addition to the shared expenses based on ownership, it is smart to set out in the agreement how the sale of the property will be handed at some future date.   Irrelevant at the time of purchase, but down the road, a huge benefit. 


What happens if one party wants to sell and the other does not?  A first right of refusal clause, would allow the party to the agreement that does not want to sell, the right to purchase the interest of the party wishing to sell before the interest is sold to someone else, if permissible. 


When looking at investing with a partner,  there are many things to consider.  Once you have outlined the basis terms of the partnership,  it is a good idea to speak to a lawyer to prepare an agreement outlining the terms agreed upon.


It is an added expense, which in the long term is a priceless document.   Don’t take shortcuts and rely on verbal agreements, know what your expectations are and your potential partners. 

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