Are you thinking of buying a house with a friend? If so, you’re not alone. Many people have made money by investing in real estate with others. While both parties will likely benefit from the arrangement, there are some challenges and pitfalls that need to be considered upfront.
The Mortgage Depends on Both Credit Reports
Buying a house with a friend as an investment can be a great way to make money and build equity. However, there can be complications if your friend has bad credit. It can adversely impact the mortgage terms, including the interest rate you ultimately pay on the loan. The requirements for a lender to offer you a loan with less than perfect credit have become more stringent than ever in the aftermath of the financial crisis of 2008.
Credit Rating Risks
Many friends who co-own property fail to realize the full implications of each other’s credit repayment behavior. If one owner fails to make a mortgage payment timely or even defaults, it could result in a black mark on the other’s credit history and affect the ability of the person to secure future loans.
Disagreement Over Responsibilities
The idea of buying a home with a friend might sound great initially, but it can become one of the most stressful experiences of your life. Many things could go wrong over matters, such as claims deductions and sharing repair and maintenance costs. It’s not uncommon for these partnerships to turn sour from heated arguments with your partner over these issues. Try to avoid this by having a written agreement between you in place.
Start Investing in Rental Properties
If you are looking to enter the real estate business with your friend, it is highly advisable to work with experienced professionals. Private Rental Houses is a leading real estate consultancy firm in Florida that has been helping people rent and invest in good rental properties in Florida, Tampa, Orlando, New Port Richey, and surrounding areas.
Their real estate professionals help you stay clear of private rental house scams and help you deal with any private rental house complaints. Find ideal investment opportunities in Florida at their website.
Get in touch with them today.
