Quote:
Originally Posted by Hirare
I'm not sure if this is a question for you or not, but here goes.
I'm looking a buying a house with my sister. Something around 250K that is in a good neighborhood and is a bit of a fixer upper. We both have 25k to put down as the 20% downpayment.
Here's where it gets complicated, she is living out of state and is only planning on investing money in the house to make a profit out of it. I on the other hand will be living in the house and probably doing the majority of the remodeling on it. We are trying to figure out a fair way for us both to pay a portion of the mortgage so that when we sell the house 3 or so year the profit is split 50/50.
It was suggested to me that since I was living in the house I would pay whatever the fair market value for rent on the house was plus 50% of the difference between the the rent and the mortgage paymen and she would pay the other 50%. i.e. If the house would rent for $900 and our morgage payment was $1300, I would pay $1100 and she would pay $200.
All remodeling would be split 50/50 and any work I did would be given an hourly wage that would be deducted from the cost of supplies.
I hope that's clear enough. Like I said at the beginning, I'm not sure if you'd be able to help or have heard of anything like this, but any input would be much appreciated.
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It seems like you have a pretty straightforward plan. Keep in mind, however, that there will also be taxes due on the property.
However, a word of caution. Regardless of your relationship with your sister, have everything in writing, up front - including your hourly wages and what a fair market rental price would be. I would definately have something signed with her before you consider purchasing a property...