Co-investing in property with your siblings

With the growing price of housing in Australia, finding the deposit for a property investment can be hard. If you are not yet ready to settle into a property purchase to live in but want to park your existing home deposit in the property market then co-investing in a investment property with a sibling can be a good option and is becoming more and more popular.

Here are some things to consider when contemplating co-investing in property with your sibling. 

Will either of you be looking at living in the home?

If one of you is looking at this purely as an investment, while the other will live in the property, then this can make the decision in choosing the property harder. Make sure that both parties have an equal or proportional vote in selecting the property you will buy, as you both want to be happy with the decision. Decide early on how to prioritise which areas you will be looking at as well as the type of properties you will look at (houses, units or villas). These will depend on whether you are prioritising something that will earn bigger rentals now or is more likely to have longer term capital gains (but is less desirable at the moment). 

How will you manage the decision relating to the property?

If one of you is hard to locate with, for example if you are on a working holiday overseas or working in a remote site you might need to delegate authority to the other sibling or use a rental agent to make similar decision in the short term. By discussing early on how you will make any decisions you can avoid later arguments about repairs and bills. 

How will you exit the property?

While you might buy the property together as singles, over time one or both of you might like to either buy a house by yourself or with a partner and need to access the money you have tied up in your investment property. This might not necessarily come at a convenient time for the other sibling, so it's best to agree ahead of time on how you will deal with it if one of the siblings needs to sell out before the other.

It can be useful to record some of these decisions in a document you both sign so you don't need to remember all of the conversations. Once you have made all these important decisions it's time to move on to the next decision, choosing a suitable property. A real estate agent or broker can help you to find the perfect property for sibling property co-investment.