Tenants in Common

[Wenpete]

We are a couple of older people (50's) who have just come out of bankruptcy (thus have lost our house and just about everything we had), and would like to go Tenants in Common with our daughter and son-in-law. They almost own their own piece of valuable property, and would like to purchase a new property as an investment property to offset their large tax (both in the mining field), and we would like to be able to have something to go towards our retirement - later-on. Hubby is a Builder (so could add value), but is fully employed as a Building Surveyor and we have an excellent small business on the side carrying out Building Inspections.
We would pay our daughter rent so they can negative gear, but, are not sure how to work this all out.

We would really appreciate some input from anyone who has some experience and knowledge in this field of Property investment, please.

Wenpete

 

[blaster]

We are a couple of older people (50's) who have just come out of bankruptcy (thus have lost our house and just about everything we had), and would like to go Tenants in Common with our daughter and son-in-law. They almost own their own piece of valuable property, and would like to purchase a new property as an investment property to offset their large tax (both in the mining field), and we would like to be able to have something to go towards our retirement - later-on. Hubby is a Builder (so could add value), but is fully employed as a Building Surveyor and we have an excellent small business on the side carrying out Building Inspections.
We would pay our daughter rent so they can negative gear, but, are not sure how to work this all out.

We would really appreciate some input from anyone who has some experience and knowledge in this field of Property investment, please.

Wenpete

Sorry no ones been able to help so far Wen and I can't offer much myself either but I wish you luck with rebuilding things.
Got a good job and a great sideline business plus an offer on the table so thats a pretty good start .
But I did look into a tenants in common thing once. I can't remember the finer points but a good property solicitor will soon explain the pros and cons , dig one up and you'll be in business.

All the best with it
Cheers

 

[Propertunity]

I'm not sure I understand completely what your Q is, however, I will give it a go and you can correct me if I make a wrong assumption.

We are a couple of older people (50's) who have just come out of bankruptcy (thus have lost our house and just about everything we had), and would like to go Tenants in Common with our daughter and son-in-law.

Are you saying that you would like to buy a property jointly with your daugter and son-in-law? and if so, you would like to pay them rent if you and your husband were to rent this same property?

When you buy property with other parties it is better to do so as tenants in common rather than joint tenants. If you are joint tenants, and if you die, your share of the property will go to the other parties. But if you are tenants in common then if you die, your nominated beneficiaries inherit your portion of the property.

If I'm right so far, then my Q to you would be, "Why would you make half payments (or whatever % you agree to purchase in) on a property and then also pay rent to live in the same property?"
Is this what you are considering doing?

 

[Nucha]

Hi Wenpete

Sorry to hear about your bankruptcy but best wishes in moving forward and leaving that behind you. You certainly have good prospects.

Propertunity is correct regarding the difference between tenants in common and joint tenants.

If I understand your question correctly you are asking if you & hubby can buy part of the property, and your daughter & son-in-law buy part, as tenants in common. You will live in the property and your daughter & son-in-law will rent their share of the property to you. They will receive rent from you eg: if you were going 50/50 in the property, your rent would be 50% of the expected market rent. If this is your question then I see no reason why you cannot do this but I'm no expert. Your daughter & son-in-law will also be able to claim their share of the property expenses (rates, insurance etc). Using the example above they could claim 50% of the rates. Again, I'm certainly no expert but I'm sure this is possible.

You should ensure the contract of sale includes all names and the words "as tenants in common " after the names. You will then instruct your solicitor as to what the distribution of ownership is. Your daughter & son-in-law should also speak with their accountant regarding the potential tax deductions.

Before you do any of this you should speak with your bank or a good mortgage broker and enquire about your combined borrowing capacity using this structure. Also probably wise to seek legal advice regarding the potential complications regarding this type of structure before you commit to any purchase.

Good luck.