Home' API Magazine : October 2014 Contents OCTOBER 2014 n APIMAGAZINE.COM.AU n 79
improvements including updating the
kitchen and dated flooring.
Bree had already bought her first property
in 2005, which she still holds today.
But she knew she probably couldn’t afford
to buy her renovator’s dream on her own, as
prices were increasing.
“I could see the Perth market was rising
at the time and realised I was going to need
some co-owners to get the deal over the line.”
Her brother and sister were yet to buy their
first properties so Bree had an idea.
She proposed a three-way ownership split
with her younger siblings as a way they could
“get into the market”. Fortunately, they both
saw merit in their older sis’ grand plan and
invested in their all-important first steps on
the property ladder. The trio paid $325,000
for the property.
Immediately after settlement and with
help from their parents and friends, they
“ To appeal to a better tenant it was
important to do this work, which has also
improved its rental return, and we were able
to add some capital value straight away.”
The threesome currently share $400 income
per week from their joint investment nest-
egg, which Bree estimates is worth between
$500,000 and $550,000 today.
Rental income and expenses move in and
out of a joint bank account.
The siblings decided not to engage a
property manager and instead manage
tenancies themselves, which Bree says is a
situation currently under review.
“Our biggest challenge stems from the
fact we don’t use a property manager and
we don’t necessarily have balance regarding
who supports (the joint asset’s) property
management requirements so we’re currently
reviewing this. Otherwise we really don’t
have any issues at this stage,” she says.
“Our first tenant was amazing and stayed
for ages but our second tenant didn’t pay
rent for the final four weeks of the tenancy
so ended up in court as we had to apply to
use the bond ... it took about six months in
the end but it wasn’t a huge stress as we knew
we’d eventually get the money. It was more of
an annoyance. We had landlord’s insurance
and I highly recommend it.”
Asked if she foresees any future challenges,
given the siblings don’t have a written
contract outlining exit strategies, Bree says
“the only thing may be if down the track we
have families, how would that person get out
of the deal?
“We haven’t faced any issues so far and may
be okay, but it will be interesting to see how
we’ll resolve this issue if any party ever wants
out of the property as we don’t have this
“I’m confident we’ll figure it out as we
have those kinds of relationships but if I was
advising someone on how best to buy with
siblings it’s still probably easiest and best
to document exit strategies upfront before
making a purchase.”
In recent years, Bree’s brother Aaron
has independently bought another rental
property unsecured by his maiden purchase.
Her sister is yet to reinvest.
She sees the trio holding the high-
performing asset for the next decade. There’s
a very real possibility they’ll be able to
develop the site because part of the suburb is
in the process of being rezoned.
“We haven’t spoken about it yet and
my siblings may think differently but I’m
thinking it would be nice, three to five
years’ from now, to apply to subdivide and
potentially develop. If that does come up, it
will be purely good luck.”
ROCK, PAPER, SCISSORS
Lauren Chapman-Holle and her younger
brother Tom have shared a love of housing
“We grew up in Western Australia and
spent many hours building tree-houses and
cubbyhouses together,” recounts Lauren, who
today lives in the former gold rush city of
Kalgoorlie with her husband Dave.
“You make your own fun growing up in
Jump forward a couple of decades and the
siblings now plan to build wealth from jointly
buying bricks and mortar.
It was Tom’s idea to pool funds with his
sister and her husband to buy rental property.
“ Tom approached Dave and I with this
proposal back in 2011 as he really wanted to
invest in real estate before he headed overseas
for an indefinite working holiday.
“Dave and I had also been discussing
wanting to invest in property so the timing
was good and it made a lot of sense to
“Individually, none of us were in a position
to buy the type of investment property
we were keen to acquire but this buying
strategy meant we could afford the type of
property we wanted, which was a low-
maintenance upmarket apartment appealing
to professionals and that would command
strong rental return.”
Lauren had got a foothold in the property
market at the tender age of 21 when she
bought her first house, a three-bedroom
What do I need
f What are the living arrangements?
Will all siblings live in the property or
earn income from renting it out partially
f Money matters.
Lenders will still look at income,
expenses, assets and liabilities of each
borrower. “Keep in mind that if the
buyers aren’t a ‘couple’, some lenders
may assess their loan approval based on
higher, individual living costs,” Mortgage
Choice’s Jessica Darnbrough says.
f How will this purchase impact future
If you want to buy another property, say
with a future spouse, how will lenders view
f Can you afford the whole debt?
Just because you’re not spouses
doesn’t mean you’re not responsible for
the whole debt if the other sibling can’t
pay their share.
f Get professional advice.
Before signing anything, seek legal and
f Draft a co-ownership agreement.
“Get this cornerstone legal document
to set out the roles and responsibilities
of each sibling and clarify all important
issues upfront, like what happens if one
party wants to sell,” Darnbrough says.
BUYING WITH MY SIBLING
Family Money n FEATURE
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