B
BillyJohnson
Guest
Hi
My parents suggested investing in an apartment with myself and my girlfriend in Dublin. They were going to buy 40% with cash upfront and my girlfriend and I were going to take out a mortgage for the other 60%. We were planning to sell in 5-10 years and everyone was going to take their proportion of the sale money.
However, the banks will not give myself and my girlfriend a mortgage unless our names and only our names appear on the title deeds. We are going to draw up a separate agreement with my parents granting them their proportion. However, they say that without their names on the deeds, they are taking a higher risk and want us to guarantee a minimum return of whatever they would get had they invested the money in a Rabobank (online bank - current interest rates are 3.2% and should rise) account instead. If the price goes up, however, they would get their full 40% of the sale price.
In addition to this, they get 40% of the rent from our spare room and parking space. Their 40% is now worth €228,000 and the rent would be about €52,000 over 10 years (which is a 23% return over 10 years).
Do people think we're getting a fair deal or would we carry too much of the risk if property prices fall?
Thanks,
Billy
My parents suggested investing in an apartment with myself and my girlfriend in Dublin. They were going to buy 40% with cash upfront and my girlfriend and I were going to take out a mortgage for the other 60%. We were planning to sell in 5-10 years and everyone was going to take their proportion of the sale money.
However, the banks will not give myself and my girlfriend a mortgage unless our names and only our names appear on the title deeds. We are going to draw up a separate agreement with my parents granting them their proportion. However, they say that without their names on the deeds, they are taking a higher risk and want us to guarantee a minimum return of whatever they would get had they invested the money in a Rabobank (online bank - current interest rates are 3.2% and should rise) account instead. If the price goes up, however, they would get their full 40% of the sale price.
In addition to this, they get 40% of the rent from our spare room and parking space. Their 40% is now worth €228,000 and the rent would be about €52,000 over 10 years (which is a 23% return over 10 years).
Do people think we're getting a fair deal or would we carry too much of the risk if property prices fall?
Thanks,
Billy