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Can't afford to invest in property alone? Consider a partnership…

by , 29 May 2015

Investing in property is a great long-term investment. Over the years, the property should appreciate in value. And then there's the monthly income from tenants you'll receive.

But if investing in property is out of your reach financially, you could consider going into a partnership to share the costs.

Read on to find out more…

Investing in property through a partnership

Buying property this way isn’t only a good thing to consider if you can’t afford it as an individual. It’s also allows you to expand your property portfolio at a faster rate.

When it comes to picking a partner to go into property investing with, it could be a friend, family member or someone with similar goals that you have.

If you opt to buy property through a partnership, it’s practically the same as if you were buying the property as an individual.

The ins and outs of buying property in a partnership

Unlike buying a property as an individual, with a partnership you share the debt liability. And the capital you put into a property comes from both of you, rather than just you.

When it comes to the tax side of things, the partners also share the burden. SARS treats partnership tax in the same way as an individual. This includes capital gains tax and income tax.

The vital thing with a partnership is to do it with someone you trust. You also want to try to ensure the partner you pick is financially stable too, otherwise your property investments could be at risk.

If you wanted to make the arrangement more formal, you could opt to start up a close corporation (CC). This does have different tax implications through.

You can find out more about setting up a CC, read this article.

So there you have it. Why you should consider a partnership if you can’t afford to invest in property alone.

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Can't afford to invest in property alone? Consider a partnership…
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