A Joint Venture is an agreement by two or more parties (can be individuals or companies) to work together for a mutual benefit. In the property industry this could be between someone who has identified a property but doesn’t have the finds to purchase it or it might be an individual with the money to invest but is looking for a partner to do the work, there are a variety of different scenarios for the formation of a Joint Venture but ultimately, they will all share the same vison and goals.
In our examples, we helped a recently retired couple team up with their son to form a Joint Venture and find a suitable buy to let property. The couple wanted to invest a cash lump sum received from their pension and the son had savings he wanted to invest in property but didn’t have enough to make a purchase on his own.
In addition to finding the property we also provided our advice regarding the refurbishment of it for rental purposes and the legislation and certificates they would require.
We are sure they won’t mind us saying that they were initially a little taken aback by the amount of work involved both refurbishment and paperwork. We were able to guide them, provide our advice and introduce them to our trusted suppliers to assist with the various tasks required.
In the second example, three friends had mulled the idea of pooling their resources into a Joint Venture to buy a rental property. In this instance, the trio realised that by doing this they would be able to afford a more suitable property to provide the yield they wanted to achieve. (The yield is the return they achieve on the income received from the rental of a property. It is often calculated by dividing the total amount invested by the annual income).
We found two suitable properties in the area they wanted to purchase in and had an offer accepted on one. The property only required superficial work mainly to ensure the utilities were safe to use and had been serviced.
In both cases, we have been retained to find tenants for the houses and provide our property management services.
If you are considering becoming a landlord via a Joint Venture, please get in touch and we will be happy to provide our professional advice and assistance.
Please phone 01633 401070 or email smooth@smoothmovesagents.co.uk
