It's My House: How Property co-ownership works.
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Many people want to invest in property, but not everyone can afford to purchase a house, apartment or piece of land. Co-ownership for investment purposes is a good way to get onto the property ownership ladder, but it’s not something to jump into blindly. Owning property with a friend, sibling or other close family friends can be tricky. Here’s what you need to know about property co-ownership in South Africa.
WHAT IS PROPERTY CO-OWNERSHIP?
Property co-ownership is when two or more people own a property together. This applies to the entire unit and property. One person cannot, for example, solely own certain parts or areas of the property. As a whole, the property is owned by everyone involved. You can, however, have larger or smaller share amounts of a property. For example, one owner could have a 70% share, while another has 30%. This means that one owner pays 70% of the bond and the other 30%, and in the event of the sale, the profit will be divided up in that split, too.
Skoko Sebola, Principal at Leapfrog Midrand, notes that this is becoming a popular way for younger people to get into the market.
“It’s becoming increasingly more difficult for young people to secure the capital needed to own their own homes,” notes Sebola. “This is why we’re seeing more of them go into co-ownership with a loved one, a friend or business partner. It’s a good starting point and, after the initial payments and fees, often works out the same as co-renting a place together.”
WHAT IS PROPERTY CO-OWNERSHIP?
Property co-ownership is when two or more people own a property together. This applies to the entire unit and property. One person cannot, for example, solely own certain parts or areas of the property. As a whole, the property is owned by everyone involved. You can, however, have larger or smaller share amounts of a property. For example, one owner could have a 70% share, while another has 30%. This means that one owner pays 70% of the bond and the other 30%, and in the event of the sale, the profit will be divided up in that split, too.
Skoko Sebola, Principal at Leapfrog Midrand, notes that this is becoming a popular way for younger people to get into the market.
“It’s becoming increasingly more difficult for young people to secure the capital needed to own their own homes,” notes Sebola. “This is why we’re seeing more of them go into co-ownership with a loved one, a friend or business partner. It’s a good starting point and, after the initial payments and fees, often works out the same as co-renting a place together.”
