Building a shared property portfolio is a big milestone for any couple.
If you’re not on the same page about what to do and what to expect, it could end in a disaster.
As property investors, Jess and Jacob could only be described as lucky.
The two met and became a couple in college. Since Jacob finished university a couple of years before Jess, he had racked up some savings that he didn’t want just sitting in the bank. Instead, he decided to get a three-bedroom house in the same neighbourhood his parents lived in.
Meanwhile, Jess was still mostly focused on getting her degree. She had no time to do any real research about property investing, but she was on board with Jacob’s idea.
And so, they signed and closed their first property investment without so much as an investment thesis or a long-term investment plan. No real targets and no real strategies—except crossing their fingers and hoping for the best.
Luckily, the couple had friends who wanted to move closer to town, so they were able to rent out the three-bedroom privately… and the same tenants have been there since 2015. This gave them a pretty good starting point for the rest of their investment journey.
Looking back at it now, Jess and Jacob knew they were lucky to have avoided financial and romantic ruin despite diving headfirst into property investing without any real strategy. If things hadn’t gone as well as they did, that first investment could have cost them their relationship!
So, they decided to stop pushing their luck and got expert guidance for all their next investments. And albeit belatedly, they sat together and talked strategy.
In this article, we’ll share with you the six questions Jess and Jacob asked each other to make sure they’re perfectly aligned in their expectations with property investing.
6 Questions to Ask Your Partner Before Investing in a Property Together
The reality is, not all couples will be as lucky as Jess and Jacob when it comes to investing in a property together. One bad deal could land you and your partner in a financial mess that could be pretty hard to recover from.
So, before buying your first property together, make sure you and your partner sit down and ask each other the following questions:
Question #1: What’s our common goal?
When Jess and Jacob started investing, they basically had no goals whatsoever. But the success of their first property opened their eyes to all the possibilities that they could realise in the future as property investors. And together, they decided on one goal:
To earn enough from property investing so they’d only have to work a couple of days a week and be able to go on more road trips.
So, what kind of life do you and your spouse or partner want to have together? And how could property investing help you achieve that kind of life?
That’s the first thing you need to decide on before you decide to go into property investing together.
Question #2: How much money do we have access to?
Getting access to the capital for your first investment is one of the most important things you need to sort out as a couple. In the case of Jess and Jacob, the latter had graduated ahead and saved some money for a good first investment.
Now, how about you and your partner? Do you have access to cash which you could use to fund your first property together? How about access to equity or credit to help you get started?
If you don’t have access to any of those things, then you and your partner have a lot of planning to do when it comes to coming up with your investment capital.
Question #3: How much risk are we going to take?
Here’s where things usually get tricky.
See, every person’s got a different risk appetite, especially when it comes to investing. Some people tend to go for high-risk, high-reward investments, while others would rather stick with low-risk investments—even if it means they only gain a minimal reward from it.
If it so happens that you and your partner have different risk appetites you have to find a proper compromise. After all, you’re going into property investing as a couple, which means you have to sign deals you’re both happy with.
And if you do decide to go the high-risk route, make sure you have contingency plans on how you would mitigate some of those risks.
Question #4: What will be our respective roles in our investing journey?
Property investing can be a lot of work, especially in the beginning. You’d have to talk to agents, sellers, and bank representatives… while also dealing with a mountain of paperwork to get things going.
As such, it’s very important that you and your partner have a clear division of tasks so that you’ll know who’s going to be responsible for what.
Question #5: What’s our timeline like?
Smart plans are always based on a specific timeline. If your goal is to have five shared investment properties in 10 years, then you need to determine a timeline that will help you get there.
It is at this stage that you and your partner need to factor in your respective schedules and life goals.
Are you both going to stay in your current jobs while investing on the side? Or are you planning to eventually quit your jobs to go full-time as property investors? What other responsibilities and commitments do you two have that could affect your investing strategy?
These are the questions you need to tackle in order to come up with a reasonable timeline for your property investing plans.
Question #6: Who do we work with?
Jess and Jacob think the best advice they could give couples who are also interested in property investing is this:
To engage a professional—at least for your first investment.
As mentioned earlier, the two got lucky that their first investment panned out. But for the next two properties they bought, they made sure they had the right guidance.
See, whenever they mentioned to people that they were looking to grow their property portfolio, they’d get unsolicited advice on what to do. They get comments like “Oh, you should get negatively geared properties.” or “Get a property in this area. I heard it’s about to blow up.”
But Jess and Jacob noticed that these comments usually come from people who only own the property that they live in. So, they were very hesitant to take advice from such people.
To drown out the noise, the couple decided to seek out professional help from buyer’s agents who know about the real estate industry better than anyone.
This has helped them avoid costly mistakes while growing their portfolio… and has kept them on track to reach the goals they’ve set for themselves.
Start Investing on the Right Foot
With three properties under their name and a second baby on the way, Jess and Jacob couldn’t be happier that they decided to get into property investing early on.
Now, they’re well on their way to achieving their goal of going on regular road trips while creating a stable future for their growing family.
The good news is that you and your partner could achieve the same results. All you have to do is start looking at property investing as a potential means to reach your goals.
And hopefully, the questions we’ve laid out in this article could serve as a guide to help you get started on the right foot.