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.

Originally Posted by NoSoup

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...