Living together before marriage is not the scandal it once. In fact, not only has it become the norm, but more and more couples are also choosing to buy property together before getting married.
Is this a risky move or a daringly practical one? Let’s weigh up the arguments and then round things off with some helpful advice.
The good and the bad
The good is that it is more affordable to buy property when you’re buying with someone. Property is expensive, but if you are two income-earning individuals in partnership, your repayments are theoretically halved. Have a look at a bond repayment calculator to see how much you’d be paying alone, and then think how much easier it will be paying only half!
The potential bad is of course quite obvious. As much as you want to believe that you and your partner will be “together forever” the reality is that statistics don’t paint the most comforting picture.
For couples who decide to move in together before getting married, within five years. It is unclear what the statistics would look like for couples renting versus couples buying, but the fact remains that breaking up is a possibility to contend with.
If you breakup while owning property together, the matter becomes a bit more complicated than divvying up your CDs.
Advice to protect the both of you
If you want to buy property together, then you need to treat this matter as more than a show of love or a step in your relationship. This is a serious financial investment and as such it is paramount that you dot your i’s and cross your t’s.
First of all, familiarise yourself with the basic laws. For instance, there is this stubborn belief that after living together for seven years in South Africa, a couple is considered married under common-law. This is not true.
Secondly, decide on who owns what. In other words, what percentage of ownership each of you is entitled to. It doesn’t have to be a 50/50 split. If one of you contributes more towards the deposit and payment, you might want to be entitled to a greater share in ownership.
This doesn’t mean that one of you owns the house more than the other. Technically you both still own the property. It’s just that if you should sell the property, it will make splitting the profits easier.
Once you’ve come to an agreement, then sign a written property agreement with your partner, where you specify the percentage of ownership. This is the most important step!
Even if you both do want to share the property equally, the property agreement is important for other reasons as well. It will help you determine beforehand what will happen to the property in the case of a breakup. Things can get messy without prior written agreement. For instance, both of you might want to continue living there, or one might want to sell the property and move on while the other would rather keep it as an investment. And what happens if you’re still busy paying off the home loan?
These kinds of considerations might seem awkward to have with your partner, but it is absolutely vital. If you are mature enough to be buying property, than you are mature enough to have this talk. Think of it as a chance to make sure you and your partner are both on the same page about the property and your financial futures.
There you have it. Buying property with your partner without being married isn’t as crazy or risky as some make it out to be. It could even be considered a practical move. As long as you both have come to an agreement on the particulars and gotten it in writing.
Buying property can be a sound financial investment for your future and doing it with someone you love is a wonderful adventure.