Jan 28, 20By Sam Morales

Whether marriage is or not in the cards yet, the thought of investing in a real estate property with your significant other is much scarier than buying a condo, townhouse or house and lot on your own. Property buying means sharing the responsibilities of keeping the home well after you have paid your mortgage in full.


It also gets more complicated if your relationship falls apart, even if you plan to walk in the aisle in the near future. How do you actually fulfill your real estate commitment, especially if you hate each other’s guts?


Here are some best practices you should apply when taking the homebuying plunge with your boyfriend or girlfriend. These can also apply to family members or friends as well:


1. Draft a co-investment agreement first.

A co-investment agreement is a simple contract between you and your partner/family member/friend that outlines terms and conditions you will both agree to in buying the property. This way, everything is outlined in paper and any disagreements that may arise will be resolved accordingly as per agreement. 


Moreover, this will also dismiss the emotional quotient when dealing with disagreements. You will actually thank us for this later.


Before signing, you may want to have legal representation present and explain the terms and conditions as agreed and record the event before signing and notarizing the co-investment agreement.


2. Determine how to purchase and finance your property, including upkeep and documentation costs.

It is normal for couples to split the downpayment and amortizations to a certain percentage. In some cases, others will agree to one taking care of coming up with the entire downpayment and the other shouldering amortization payments. 


Whatever the financing setup is, make sure it is well defined to clarify your roles in the homebuying process.


3. Plan the inevitable

At this point, some couples will disagree on the idea of considering terms in case of a breakup, or extenuating circumstances like loss of job or death. Because love, right? However, this is extremely important for two reasons. 


One reason is that an agreement written in paper enforces the couple to fulfill their responsibilities in handling situations that will most likely be too emotional or overwhelming to handle. 


Also it will help mediate things regarding property ownership as either tenants in common (each partner owns a proportionate share of the property) or joint tenants with right of survivorship (each partner owns an equal share of the property and has the right of survivorship if one passes away).


4. Do every significant step as a pair

You each may have well-defined roles in the agreement, but being there together at every homebuying milestone is important. This way, you do not miss certain aspects of your investment as you move towards the next stage of your homebuying journey.


Moreover, payments should be done in a joint account. You can both set up automatic monthly payments to fund the joint account for all costs and expenses related to your homebuying journey. This also reduces the hassle of sorting out the costs because using one account simplifies your budget tracking.


5. And finally, learn to respect each other

Whatever happens, there should be a certain level of respect you afford to your partner. Respect means following through with your commitment and responsibilities as a co-investor. Never use emotional baggage to settle your disputes nor use arguments as leverage to gain the upper hand. 


If you both decide to settle this in court, the court will always refer to your sales contract and investment agreement (if you decide to heed our #1 advice).


Ready to invest in a condo, townhouse or house and lot with your partner? Search for your potential investment here.