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Should I Take Any Precaution Before Buying a Property with My Brother?

Full Question:

My brother and I are planning to pool our resources and buy an investment property. As our parents are on a pension we would like to buy something that they can live in. Our plan is for them to pay rent equivalent to what they are currently paying. Are there any issues we should consider before we do this?
Answer - On family investment Harry says:
I cannot advise you on your investment decision and though your question does not relate to a family business as such, you have highlighted a fundamental family business issue, separating the family or emotional aspects from business or commercial considerations.
When you enter into any joint undertaking it is vital that all parties have a common uniting vision. In your case your first decision is whether you are buying the property to provide a home for your parents or as a wealth creation exercise.
If your key purpose is to provide for your parents, your considerations might include ensuring you meet their needs in terms of size, location and facilities. You will probably also find that they will want to be involved in the discussions. On the other hand if it is primarily an investment decision your decisions will be based on maximising your return and your parent’s preferences would become a secondary consideration.
Once you have agreed on your purpose you would be wise to clarify an exit strategy. This would involve discussions on issues such as how long you are planning to hold the investment and what you will do if one of you wants (or needs) to sell.
Dealing with some of these questions might not be easy, but I believe that raising them before you enter into the arrangement is better than trying to deal with them on an ad hoc basis if they subsequently arise. And by the way, don’t forget to put your decisions in writing for future reference.
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