I live in France where banks will not allow you to pay more than 35% of your monthly net revenues towards a mortgage (even if it's for a cash-flowing rental property). Sigh...
I'm at my limit due to my PR, but my boyfriend, who earns about 4x more than I do, is not. He has agreed to co-sign for the loan. We bought our primary residence together, btw.
I have located an excellent deal for 120,000 euros that would require about 30,000 in renovations plus furnishings in order to rent the apartment out to students and AirBnb. I would need to provide the 20% down payment and pay all renovation costs on my own (I do have the cash). So I would put down 50,000 euros totalof my own money.
I will oversee all of the renovations and manage the rentals.
How should we divide the equity? I don't want to give him next-to-nothing, as he is making the opportunity possible and taking on some risk.
We would like to keep it long-term, but who knows? If we sell, do I recuperate my initial investment and then we split the profits 75%/25% ? Or do we just split the profits in terms of some other percentage that seems fair? What percentage would you suggest?
My concern is that if we decide to sell in just a 3-5 years, the capital will barely be paid down. And while the property will surely be worth more due to the renovations, I might not get back my initial investment (let alone benefit from the gains) if we just split based on an arbitrary percentage.
Thank you for any insights you may have.
