{"id":21850,"date":"2018-07-23T01:00:31","date_gmt":"2018-07-22T15:00:31","guid":{"rendered":"https:\/\/realestatetalk.com.au\/?p=21850"},"modified":"2018-07-23T01:00:31","modified_gmt":"2018-07-22T15:00:31","slug":"one-third-of-aussie-are-willing-to-co-share-david-dawson","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/one-third-of-aussie-are-willing-to-co-share-david-dawson\/","title":{"rendered":"One third of Aussie are willing to co-share \u2013 David Dawson"},"content":{"rendered":"

Property prices and their general inaccessibility are ongoing issues for many Australians. As such, millennials are turning to alternative methods to gain their first step onto the property ladder. One emerging trend enabling their dream \u00a0is property co-ownership with friends and family. In fact, 31% of Australians said that they would consider co-buying property with a friend or relative.\u00a0 We talk to David Dawson<\/strong> from co-ownership site Kohab about how to prepare if that is going to be your strategy.<\/p>\n

Transcript:<\/strong><\/p>\n

Kevin:\u00a0\u00a0<\/strong>With housing affordability the way it is around Australia, no doubt people are looking at creative ways to get into the market. We\u2019ve talked about that in the show in the past in terms of co-ownership, so I was interested to see the other day that there is now a dedicated website called Kohab that helps people do exactly this, share the cost of purchasing a property with other people. Joining me now is one of the co-founders of Kohab, David Dawson who is also the CEO.<\/p>\n

David, thank you very much for your time. Interesting concept, this. Certainly not new, but it does actually bring with it a few areas that we need to be aware of before we jump into this.<\/p>\n

David:\u00a0\u00a0<\/strong>Co-ownership has been around, I think, for 260 years since tenants in common. So, it\u2019s certainly not new, but more people are taking advantage of buying together, because as you said from the outset, affordability is beyond most people.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>So, tenants in common, explain how that works.<\/p>\n

David:\u00a0\u00a0<\/strong>Tenants in common is one of the two traditional ways in which people in Australia will buy property \u2013 either that or joint tenants, traditionally. Tenants in common basically allows two, three, or four parties to buy together and essentially own a portion of an asset if they\u2019d like.<\/p>\n

So, couples, married couples, friends, it doesn\u2019t really matter. Buying as tenants in common will own the asset in common as opposed to owning, and perhaps on their passing, joint tenancy goes straight to the next of kin.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>And also, tenants in common were able to split the ownership in certain percentages.<\/p>\n

David:\u00a0\u00a0<\/strong>Yes, you can split it in any way you want. So, your property, the property portfolio identifier number basically just has a percentage following it once it\u2019s registered with the land titles office based on the percentage of ownership. You need to make sure that you do do that, though.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>One of the big benefits of this, of course, is deposit. Putting together a deposit is one of the hardest things. How do the banks look upon coownership? Are they fairly relaxed about it?<\/p>\n

David:\u00a0\u00a0<\/strong>43% I think is the latest number of tenants in common contracts that have more than one person on the title. So, they\u2019re very used to looking at it. I think it comes down to making sure that when you do get a loan, you get a loan that ideally is only assessed on your ability to service your portion of the debt as opposed to your ability to service the whole debt, which is why structuring it the right way allows you to have a smaller deposit if you\u2019re buying with someone else and then only be accountable for your portion.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>If you had three co-owners in a property, it\u2019s likely you\u2019re probably going to have three different lenders, or do they normally go to the one lender?<\/p>\n

David:\u00a0\u00a0<\/strong>It\u2019s easier to go to the one lender. It can be done, again, because essentially, the asset is split three ways, but the reality is banks don\u2019t really like it, so it\u2019s probably easier to go to the one lender.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>Yes. I guess getting into this, the agreement that you would have upfront is very important. Many times, I\u2019ve seen friendships come unstuck, even relationships come unstuck over the decisions that need to be made around property. So, setting that agreement in place is absolutely critical, I\u2019d imagine, David.<\/p>\n

David:\u00a0\u00a0<\/strong>Yes, the first thing that we recommend before anyone buys anything, before they even start looking, is to really understand your expectations and the expectations of your co-buyer or co-buyers and really be clear on what that is. Because as you said, it\u2019s a big purchase, and unless you\u2019re clear and flexible and upfront about what you\u2019re looking for, then it can end badly.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>Yes, it\u2019s a great way to turn a friend into an enemy by not getting your agreement straight. And as part of the agreement, having an exit plan or a strategy that you talk about upfront in the event that someone wants to sell?<\/p>\n

David:\u00a0\u00a0<\/strong>Yes. Again, as before, tenants in common, co-ownership has been around for centuries, but the reality is I would treat it as a business partnership as much as a home or an investment purchase. So, being clear on what happens if one person wants to leave the group, how that\u2019s funded, how the other people buy in, or is there a sunset clause in there?<\/p>\n

Co-ownership doesn\u2019t have to be a forever thing, it can have a sunset clause of whatever period you want that basically says \u201cRight, this is going to get me on the ladder, but at a certain point in time we\u2019re going to all agree to sell the asset.\u201d And that might be one person buying the other out, or it might be putting it on the open market for full sale.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>Yes, co-ownership, of course, brings with it the sharing of all of the costs, and that agreement would come into play if someone doesn\u2019t meet their own costs. The other people have the option to buy them out, David.<\/p>\n

David:\u00a0\u00a0<\/strong>Yes, that\u2019s correct. The co-ownership agreement that we have on our site \u2013 which is kohab.com \u2013 basically is a master document which then once downloaded and reviewed, you can strike out the parts that don\u2019t relate to your relationship or add others in there, but it\u2019s a pretty comprehensive agreement and a good place to start.<\/p>\n

Kevin:\u00a0\u00a0<\/strong>Yes, I\u2019ve checked the website out. There\u2019s a lot of really good information in there, lots of tools to help you do this. As David just said, the agreement is there, all the information about even making it easier to get a loan and get the insurances that you need. The website is called Kohab.com.au. David Dawson has been my guest.<\/p>\n

David, thank you very much for your time.<\/p>\n

David:\u00a0\u00a0<\/strong>Thanks so much for having me on. I appreciate it.<\/p>\n","protected":false},"excerpt":{"rendered":"

Property prices and their general inaccessibility are ongoing issues for many Australians. As such, millennials are turning to alternative methods to gain their first step onto the property ladder. One emerging trend enabling their dream \u00a0is property co-ownership with friends and family. In fact, 31%…<\/p>\n","protected":false},"author":176692473,"featured_media":21845,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,33,10,11,13,36,22,25,27],"tags":[101],"class_list":["post-21850","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-case-studies-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-sponsored-channels","category-trends-topic","tag-podcast"],"yoast_head":"\nOne third of Aussie are willing to co-share \u2013 David Dawson - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/one-third-of-aussie-are-willing-to-co-share-david-dawson\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"One third of Aussie are willing to co-share \u2013 David Dawson - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Property prices and their general inaccessibility are ongoing issues for many Australians. 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