Joint Apartment Purchase (Siblings)

Hi,

My sister and I are thinking about buying property in Berlin. My sister (a doctoral student with very low income) would live there and we would finance the apartment together. I myself live in the USA and as a high earner should be able to provide sufficient collateral.

However, we are now wondering exactly how to proceed, the following ideas are on the table:
- We both conclude the loan agreement, I provide the collateral
- As a tenant, my sister would pay 50% of the interest + additional costs + taxes
- The repayment could be divided depending on life circumstances, either 100% me or mixed

Does anyone have experience with such a model or what would you do differently?

Regards C.

Hello,

there are several "pitfalls" that you have to "navigate". It basically doesn't make sense to me why you both want to finance and appear as owners. This usually leads to family stress. If you were to buy the condominium and rent it to your sister, this model would be easier for the banks. The model you are choosing here would, in my opinion, be a GbR. At least if you were to rent out the condominium to third parties at some point.

The bigger problem, I see, is the financing. You, as the main earner and financier, live and earn income abroad. Since personal liability is very important to German banks, you will fall through the cracks at the banks. German banks do not finance Germans who earn money abroad. Most of the time it is only cross-border commuters like Switzerland / Germany & Benelux / Germany.

Good luck!