Taking the vows – Of property investment

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The cost of living, coupled with escalating property prices, can make it difficult for the start-up investor to enter the market, especially when you are dependent on a single salary income.

Therefore, it can be a lot easier to romance your lender with a double income application when trying to get finance for your investment properties.

According to Homestart finance CEO John Oliver, while it makes sense that couples can get started sooner as they are usually a dual income household, there are also other factors which show couples are generally more prepared to make a commitment to home ownership.

“Affordability remains an issue for all home buyers, and singles can find it harder to save enough to cover upfront costs like deposit, fees and charges on just one income,” he says.

For couples yet to tie the knot, creating an investment portfolio together can be a profitable and proactive way to strengthen your commitment, but it does pay to do some research before you take the plunge – just in case.

Legal experts recommend couples enter into written contracts, similar to prenuptial agreements before they make any purchases.

Agreements like this can be drawn up by a solicitor and include options such as eligibility for one partner buying the other out should the relationship end, or what happens if one partner dies.

It is also important for investors with an established portfolio to ensure their existing assets are protected before engaging in any kind of future investment or change of relationships status with a partner.

Taxation expert Eddie Chung, partner and advisor at BDO (Qld) Pty Ltd, says relationships and finances may seem like separate aspects of someone’s life, but they are actually inextricably related.

“Inviting someone special into your life means that you are also inviting them into your financial world,” he says.

“If you own material assets when you enter into a relationship, you need to understand that such assets could become ‘divisible property’ if the relationship breaks down in the future.”

His advice is to protect these assets by speaking to a family lawyer who can advise you on steps that could potentially reduce the likelihood of you losing some of these assets if the relationship turns bad.

“You may be advised to enter into a Binding Financial Agreement or pre-nuptial agreement, which could involve some delicate discussions between you and your partner,” he says.
 

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