When it is time to buying investment property in Australia with a spouse is a very, very good question. And how do we do it? So the first thing we need to talk about is the real investment trust if you do buy an investment property with your spouse, how do you split it? Because if you do a 50/50 and one person isn’t working and the other person’s the main income provider, well, the problem we’re going to have is that 50% of the tax benefits, if it’s a tax beneficial property, is going to be lost because that person doesn’t work. So then we have to consider whether we actually reallocate a high percentage of ownership to one person. It could be if you’re de facto but don’t even live together, maybe it’s just one person buys it and other person stays out of the transaction. You’re married and lived together, well maybe you might go down to 99 and one or you still might as well buy in your own name.
A conveyance that can help with the complications of the ownership split and how you make that decision and a financial advise search real estate investing near me, a tax person would be able to guide you on the correct way to allocate. The other thing we need to think about with the capital is your risk appetite. So generally when I speak to couples, I find that one person’s more aggressive in wanting to do something than another one. It’s very rare that both partners have the exact same risk appetite in relation to a property transaction. So what you need to do is find alignment in the decision that you make as a couple because, otherwise what I see happens in the future is the person that’s not completely aligned will become disappointed with the decision that the main proactive person wanted to take.
So talk about the risk, talk about your alignment, and really get an understanding of why you’re doing it and you’ll find in future videos to come why I talk about what’s your magic number, that helps bring alignment? When do you not buy an investment property together as a couple? If your relationship is in a tough situation, being challenged, I would highly encourage you to wait before buying an investment property. Because there’s nothing worse than getting a divorce, or splitting, or separating, or trialing it and then you’re having an investment property because you need to give an investment property time to go through the business cycles. And that sort of action can actually force a sale sooner and potentially increase the risk of a loss.