Hi everyone

I just want to get peoples opinions on whether this is a good idea......

Me and two friends are considering buying a house together in cash. I have 10k and my friends have 30k and 50k respectively. We are considering buying a house, which will have to be no more than 90k, and then splitting all costs and profit 1/9, 3/9 and 5/9 respectively.

Assuming we buy the right house and are able to get a tenant and charge around 350-400, we will all be making roughly the same amount of money as we would be from a high interest account, plus we would benefit from the steady increase in property prices.

Is this a wise thing to be doing or am I better off keeping my money in my ISA and premium bonds?
Regards
Armando

Hello Armando,
If it is all tax, you will pay tax on the rent you receive.

Add all this up, and there is a lot of hassle. But is it wise investing in something that has big risks, and may not cover it's own costs? If this is the case, you're not investing, you're speculating.

I think you need a serious think about future price increases when house prices are at record highs, and the fundamentals that pushed prices that high are receding - rising interest rates, unemployment, inflation etc

Also, investing with friends seems a perfect example for arguments. Especially as you don't have equal shares, so one person has more to gain/lose than the others.

Maybe you should add the costs, so we can do a breakdown. i.e. purchase costs, achievable rent, voids (i.e. other empty rental properties in the area), type of house (hence maintenance costs).
Keep in touch
Austin

Have you ever considered getting a loan and have the property as collateral? Then you and your friends can share the payments for the loan, even equally if you want. Then you could either share the profits or have it pay for the loan by itself.

if one of them doesnt pay the monthly loan it will be big problem for all of them sharing a loan is a bad idea
before investing think about the real income from the property
(net income) its different from what you think you might get
read my other post and you will get an idea about what you need to subtract and im sure after you do the math you will find your gain is less than the 4% with the risk you taking is just not worth it....lol
good luck anywayz

IMHO you should NEVER buy a house wiht your own capital adn always get a mortgage out.

This increases your leverage VASTLY nad massively increases your return.

PS- If oyu are investing with comeone else, even friends, get a contract drawn up