In a nutshell. Our situation is that we want to separate with as little disruption to our daughter as possible. Our preferred solution is that I remain in the home and my partner buys a second property..
Now for the details. We are de-facto and have lived in this home for 6 years. Due to some problems with my credit history and our relationship being fairly new at the time, my partner purchased the home and arranged the finance as a single person. He has the title to the property but if we separate and sell the home we would split the proceeds evenly. I originally sold my own home and put the funds into the deposit of our joint home as a gift to him.
Now we wish to separate amicably and do all we can to keep the house and stability for our daughter as well as avoid the expense of separation and division of property.
We have approximately 50% equity in the home currently valued at $500,00.
We would have equal time and responsibility in the craer our daughter and his child maintenance would be approximately $600 a fortnight.
If he moves to an apartment his rental will be around $300 a week.
Is it all possible for him to use the equity in this house as a deposit on an apartment and privately lease the house to me?
Failing that we will need to find the finance for me to purchase his half of the property but given my part-time income and lack of credit history (I cleared the bad debts but have not applied for any credit of any kind in the last 6 years or had my own savings account.) I am not optimistic about finding the finance in my own right or about the affordability of the mortgage as a single parent working part time. The median price of property in this are is $350,00 and there are very few units or affordable options that will allow me to remain close to the school our daughter attends.
It seems to us that retaining the house and buying a smaller second property that he can live in will be better. We have also considered redevelopng the block (980 m2 with a large house positioned dead centre) but that is a big inconvenience and expense that we had planned for a lot farther down the track.
I realise that there is a risk to myself in future should our relationship not remain amicable. Presently I have legal right to 50% of the property due to our de-facto status, if we separate without dividing property I need some sort of assurance that I won't lose out in future.
All thoughts and advice on this situation would be greatly appreciated.
Thank you
CazNo answers to this? I thought the people on this forum would be creative and have ideas how we can achieve our goal.
Hi Cazzie,
I will not claim to be a professional or give that advice as I am only starting out in investing myself and still needing to take the big step, I can however offer some ideas.First of all, good on you for being amicable about it, there is nothing worse for kids than seeing your dad moving away on not good terms. It is important for your daughter that you remain as friendly as possible, especially if she is young.
What concerns me is that amicability is a great thing but it doesn't cover the rent or give you a guarentee. Have you thought about getting some kind of contract written up to specify that the property is half yours? You both need to look after your own interests now as well as providing for your daughter.
Do you currently work?
You have 250k equity in your home which is no small amount. That means you both have 125k each which is a fairly sizeable deposit for a new place should you decide to sell. Seeing as your credit is not the best you could always speak to someone about doing a wrap deal for you. Your interest will be higher but it is an alternative.
The other thought I had would be considering the size of your property is to put a granny flat at the back so that you and your daughter can live in it and rent the front house out or vice versa.
This would be a cheap alternative and will take minimal amount of planning and time.I don't know if this helps but it might give you some ideas.
Cheers
Thanks Tuff-ET
I work part time and I am self employed so I'm not the best looking borrower on paper but I know there are ways of doing it.
I was looking at the property again yesterday, it's a huge block with several garden areas and has a powered shed on a concrete slab the size of a one bedroom unit. Fortunately there is no rush for this separation to happen, we are dealing with things quite well. I'm thinking we'll get a couple of people to look at the area where the shed is and give us some quotes on replacing the shed with a granny flat. Yes, we should be talking to a lawyer as well in case things go pear shaped in future.
I think I'm beginig to understand why some people seem to wait until they retire or the children have all left home before they get divorced! It makes a big dent in your joint investment plans if a lot is invested in your family home..
As a person who has been thru a divorce that was supposed to be amicable I know how things can go sour and the other person can take you for a ride emotionally and financially .Also get legal advice because custody arrangements can also affect the division of assets. On a positive note or approach, are you comfortable having a border living with you? I had a teenage girl live with me when she was finishing school. The board is not viewed as income by centrelink, my friend also has international students board with her. These options may enable you to afford repayments, although it will not be usable for a loan application. Also find out what income support you may be entitled to from centrelink.
good luck
cheers, sonya
Thanks Sonya
I've been looking at the pitfalls and what can go wrong and I guess we need to take off our rose coloured glasses. I've been seriously looking at the granny flat idea and we think it would be a reasonably good solution to have one put in. We can have an agreement drawn up about the assets division and I can move into the granny flat and rent out the main house to boarders (possibly as international student housing). If I get a full time job later I'd be able to move back inthe house and rent out the granny flat (hopefully thus avoiding capital gains tax too).
Lots to think about!
Carolyn
You must be logged in to reply to this topic. If you don't have an account, you can register here.
