What is the best way to loan money from family to buy a property

[Dean D.]

Hi BP!

I am looking at purchasing my first property and am looking at taking a loan from my sister, for the sum of ~15k. What are the best ways to make this loan fair between us? Some examples I can think of are:

a) Fixed interest paid back - If I loan 15k, and we agree on say 5% fixed interest over a period of time.

b) % interest paid back on resale of home - if/when I resell, depending on the appreciation % of the place I buy, I pay the same % back in terms of interest on the loan.

What does everyone think of these? Are there any others? Any other thoughts to share on this would be appreciated.

PS I know the downsides of taking loans from family, so would probably get something in black in white etc. if I do end up using this avenue.