House prices are skyrocketing in today’s economy, and renting a house alone can be very expensive. As a result, many people are looking for rental properties to rent a place as a group instead of taking out home loans or finding sponsored money lenders. So, you may be wondering how to get approved for a rental property with a group of friends. We’re here to help.
Whether you are living with a family member, studying together, or just a group of friends, you can pay for a rental property at an affordable rate. If you have kids, you can look up a guide to schools in Perth and find a place nearby. Talk to a property manager to find rental assistance options in Western Australia.
Co-owners sign an agreement through a property manager, purchase a property, and live together. This article covers other details for getting approval for a rental property with more than one person.
What is joint property ownership?
Joint properties are a common practice allowing a group of people to live together in a rental house.
Co-owning a property decreases the buying cost and makes it easier for you to purchase a house without taking out a loan from the bank. In addition, married couples, students, and even a single individual can get a rental application approved.
A property manager reviews your application and asks you to submit all the necessary documents, for example, bank statements, recent payslips, reference letters, contact details, a cover letter, and more. They will also check your rental history before speaking with a landlord to sign a lease.
Choose a co-ownership structure
Co-ownership is tricky, and it does not mean everyone will have an equal share of the rental property. That’s why it is important to figure out a mortgage structure suitable for all party members.
There are two forms of co-ownership structures:
- Joint tenancy
- Tenancy in common
The details of the rental application affect your tax fees as well as asset distribution.
- Joint tenancy agreement
Joint tenants have an equal share of the property, so if one party dies, the remaining tenants will get their share equally.
This structure seems ideal, but there are many problems when one owner decides to sell their share of the property or wants to go their way. Living as a joint tenant means you own the property as a group instead of as a single person.
- Tenancy in common
This form of co-ownership is more flexible and allows two or more individuals to own a share of the property. They can also transfer their interest and give you an equal share of the property. If someone wants to go a separate way in the future, then this structure gives you an option for splitting or selling your share of the property.
What are the benefits of buying a property with friends?
Rental property co-ownership is a great option if your financial situation stops you from buying a property. You can team up with friends and meet with a property manager to buy a rental property instead of taking out a home loan.
The rent money is split equally among each owner, covering all the associated fees. It includes maintenance bills, initial deposits, property management bills, home insurance, monthly rent, and more.
What are the drawbacks of buying a property with friends?
While the idea of buying a property with friends and hanging out all the time may seem like a fun idea, there are certain risks associated.
Friendships get strained when a huge sum of money is involved, and certain disagreements or fights may break out. Joint tenancy is common in the property market, but the problems associated with this scheme are also prominent.
Other risks of being a co-owner include the following:
- Less equity
- Splitting the rent fees
- How to share loans and split income
- Problems of selling the property in the future
Sign a lease agreement
Get a legal document that covers all the details of the lease and ensure everyone signs it. Even if your group has the same goals and personal objectives, it is best to sign a legal agreement to avoid all the complications of co-ownership.
The lease document should clearly explain these questions:
- Can outsiders enter the property?
- What happens if someone is unable to pay rent fees?
- What if someone wants to sell their share or leave the co-ownership?
Add more questions for discussion since it will save you from many disagreements and unwanted fights when everyone knows what to do and what not to do.
Conclusion: how to get approved for a rental property with a group of friends
The rental market has reached an all-time high, and everyone cannot afford to buy a home independently. Thus, many people buy property together to save money. Tenants pay for the rental by dividing the cost equally. Additionally, they divide all the property costs, such as maintenance fees, utility bills, and more.
A property manager reviews your rental application, which is not approved until all tenants submit the required documents. After approval, you can buy property for rent in Perth. We hope this article helped you understand how to get approved for a rental property with a group of friends.