This is a love and money question

[siyuexian]

My boy friend bought an apartment for 200K USD before we met. Now I am going to move in with him. The apartment needs renovation and to my opinion, needs also some nice furniture.

 

I have not discussed this with him but I want to find a best way to do so to avoid misunderstanding. I am prepared to pay half of the utilities and half of the mortage costs as rent while living there, and purchase furnitures. But I do not know how to handle this apartment and renovation thing. The renovation is estimated to cost about 20K USD. The apartment is under his name for about a year.

 

I do not know how to arrange this financial issues with a boyfriend. If I put in money for renovation, the apartment is under his name. Once we break up (forgive me for not trusting and believing in our relationship, but this happened to me a few times before), I will get no money back.

 

In fact, I have no interest in investing in this current apartment but more thinking of jointly purchase a house if things work out fine for us. His apartment is his, he wins on it, it is his money. He losses on it, it will also be his loss. And if it needs to be renovated, he should put money in it.

 

Problem is maybe I have to live in it in a bad condition (he claims he has no money left for renovation) until things work out good enough for us to purchase a house together.

 

I hope I do not sound fragual but I really think that it is much more beneficial and wise for both sides in the beginning to make things clear to avoid being ugly later on (hopefully that day will never come of course)

 

Any advice for practical solution for this?

[a_lifters_life]

a 200k apartment? Whole moley!

[hexaemeron]

a 200k apartment? Whole moley!

 

That's honestly nothing in an urban area. In San Francisco, that wouldn't even get you a condo in the ghetto, even today.

[FathomFear]

I would suggest not financially supporting his mortgage payments. In fact, I'm surprised he's even allowing the idea. In a worst case scenario that would entitle you to partial ownership if things ever got ugly between you.

[penelope13]

I would offer him a fair rental price, which he can use for whatever purposes. For the time being he should be responsible for all the maintenance, taxes etc as any homeowner would be doing. In response, he should have sole decision making powers in regards when to do repairs/ renovations (as long as it is maintained in livable conditions) according to his taste and preference.

 

In regards to furniture, you can either negotiate with him what you would be doing in case you split up (i think this is a fair discussion considering you are taking a serious step) or you discuss what you are both willing to spend on furniture, i.e. come up with a budget.

[BIGIDFSH]

You are very wise siyuexian

 

If you decide to live there then yes, you should pay half the utilities and half the mortgage as rent. You do not put any money into renovations unless you two have a legal agreement to put the title of the apartment into both of your names, meaning you both would own the apartment.

 

If you can't live there without the repairs being done and he doesn't have the money to do it, you may want to put moving in together on hold. As far as furniture, just agree ahead of time as to who gets what and put it in writing, just in case.

 

I am all for love, romance, trust and happily ever after but you need to be financially responsible and realistic, because happily ever after doesn't always come true.

 

Good luck!

[geekgirl4]

It seems he plans on living in an apartment for a very long time, since its 200k, not to mention the thousands that will go in for renovation and repairs. And you are leaning towards a house? Hmmm. I would be very cautious about paying half the mortgage and having your name under the title agreement.

[annie24]

i think you should talk about this with him. but if your name isn't on the mortgage, you two aren't planning on getting married yet, then yes, i would just pay him a fair market rent and pay for utilities. but i don't think you should be responsible for paying for the renovations.

 

are you rethinking the relationship?

[karvala]

It's eminently sensible to get this sorted out from the beginning, so there's absolutley no need to feel bad about this. Just as his apartment is his, your money is yours, and you should protect your interest as much as he's protecting his.

 

The solution depends on what you're proposing for the future, whether or not you'd consider changing your mind on investing in it and what his attitude to his equity is. There are a few possibilities

 

(1) If he's proposing to sell the apartment in a year, but you both want it renovated in the meantime to be able to live in it, and he doesn't have the money, then lend him the 20K on the understanding that it will repaid once he has sold the apartment. Draw up a contract for it as well. This does have to be a joint desire, though, because it won't add a full 20K to the final sale price, so if it's just you that wants it, you'll have to agree to only be repaid a lower amount, or else not go ahead with the renovation.

 

(2) If he's not proposing to sell the apartment any time soon, then consider buying into it in terms of equity, both with your money for renovation and mortgage payments. You could calculate how much he's paid for the apartment so far in terms of deposit and mortgage payments, and either pay the same amount then split the equity 50-50 if you can afford it, or get a lower share of the equity and pay a lower amount (that also means a lower amount of the mortgage payments as well, bear in mind, though not quite proportionally as low as you should cover some additional rent).

 

(3) If he's not interested or willing to allow you to buy into it, or you really don't want to invest in it at all, and he's not willing to borrow money from you (or able to repay it again after a sale in a reasonable period of time), then the only option really is not to lend it, and either live in it as it is, or wait until you can get somewhere together (even initially just rented) before moving in.