Have you ever contemplated partnering up with a friend, relative or colleague on a property investment? It may seem risky at first glance, but I can vouch for the fact that it’s definitely worth considering.
Guest post – Helen Collier-Kogtevs, Real Wealth Australia
I have embarked on many successful joint ventures (JVs) throughout my years of property investing, for myriad of reasons.
Initially, it was because Ed and I had a high disposable income to service an investment mortgage, but we didn’t have a deposit. Our options were: a) wait several years to save a deposit, or b) embark on a JV.
My philosophy is, it’s better to own 50% of something rather than 100% of nothing, and so we jumped right in!
For our first JV we joined forces with a partner who could provide the down payment while we covered ongoing expenses. The partnership was mutually beneficial and ultimately very profitable. JVs work best in scenarios such as this when two parties can come together to leverage each other’s strengths and minimise each other’s weaknesses.
For instance, you might enter into an arrangement like ours with a friend or family member, where one partner contributes towards the deposit while the other party obtains the loan and covers the ongoing property ownership costs. Or, you might decide to split the investment 50/50, enabling you to not only share the costs but also to share the risks.
If you’re just starting out on your property journey, I encourage you to consider a JV. It can help you to grow your asset base more quickly and leverage into bigger, more profitable deals – such as renovations and developments – that you simply wouldn’t be able to do on your own.
Finding a joint venture partner may not be as difficult as you think, especially if you have a good network of property investors around you. Discuss your intentions with like-minded friends, colleagues and family members and see what kind of reaction you get. Investment programs and conferences are also great places to meet similar, goal-oriented investors who you may be able to partner with.