Joint property investment: questions to settle before a shared project

The first question is financial: who puts in how much capital at purchase, who covers transaction costs, and how are future unforeseen costs shared — for instance, renovation work that exceeds the initial budget. Hypothetically: if two partners buy a property for €100,000, with one contributing €70,000 and the other €30,000, each one's share of invested capital is clear, but it is not automatically equal to their share of future profit if one partner also takes on management.

It matters to distinguish who is registered as owner on the notarial deed from how profit will be split. Two partners can be co-owners in equal shares on the deed, yet agree a different profit split in a separate written contract to reflect a different contribution of labour or management. Without such a separate agreement, the split by default usually follows the ownership shares — which does not always reflect actual contribution.

Beyond money, it is worth setting out tasks in advance: who liaises with contractors, who tracks documentation, who arranges letting or sale. An unclear division of tasks often leads to one partner doing most of the work without this being reflected in the profit agreement.

• Who decides on contractor selection and budget
• Who is responsible for liaising with tenants or buyers
• How disagreements are resolved — majority, veto, a third party

Before the project begins, it helps to agree what happens if one partner wants to exit earlier than planned — selling the whole property, the other partner buying out their share, or a right of first refusal. Without such an agreement, a disagreement on this point can block decisions for years, especially where the property is held in simple co-ownership.

Hypothetical example: if one partner wants to sell their share after two years while the other wants to hold the property for long-term rental, a pre-agreed valuation formula for the share (for example, based on a current market valuation) prevents a dispute over the buy-out price.

It is equally important to agree what happens if the project does not deliver the expected return, or the property must be sold at a loss — how the loss is shared, whether proportionally to contributions or on another basis, and who bears the risk of further unforeseen costs. Discussing realistic scenarios, including unfavourable ones, is part of assessing a property's improvement potential.

A verbal arrangement between partners protects no one in a disagreement — a dispute tends to be resolved on the facts on the ground, which rarely reflect the original intentions. A written contract drafted or reviewed by a lawyer is a sensible investment before a joint deal, not unnecessary formality. Before signing anything, it is also worth working through a comparison of different property asset types, so you are clear exactly what kind of project you are starting.