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Love, trust, and property: Couples’ guide to investing successfully
Investing in property as a couple can be thrilling but challenging, raising the question: how can partners make big decisions while keeping their relationship strong?
Arjun Paliwal, founder and CEO of InvestorKit, has joined First Property Buyer Show host Emilie Lauer to discuss how couples can successfully invest in property together.
Since buying their first property in Sydney’s north-west at 22 years old, Paliwal and his wife have built a property portfolio of nearly $20 million.
When purchasing their first property, Paliwal and his wife both worked in banking, yet even with financial expertise, they faced challenges they learnt to overcome together.
According to Paliwal, avoiding getting caught up in emotions, assigning specific roles, putting aside pride, and setting rules will be key for couples who invest together.
“We were very grateful that we found where we wanted to go, what we wanted to do, and two incomes, two heads, two people are better than one, if it’s all aligned,” Paliwal said.
Paliwal admitted that early in their property journey, he and his wife made the mistake of maxing out their $970,000 loan approval, cautioning young couples not to let emotion drive their buying decisions.
“[Young buyers] ask, ‘What’s the most I can get? And then what’s the best I can get for the most?’
“Rather than ‘What might be right for me? What’s the right fit? What could I do with leftover money if I wanted to?’”
Additionally, when purchasing property as a couple, Paliwal said it’s essential to be on the same page as one another to ensure the best outcome for financial purposes and for the relationship.
“I would say that the successful property scaling that we’ve seen with over 2,000 purchases made, hands down, the couples on the same page always take it the furthest,” Paliwal said.
On the other hand, if a couple fails to align their goals, it can spell trouble for the relationship, with financial reasons being one of the largest factors contributing to divorce.
Paliwal said he and his wife keep their relationship strong during the buying process by taking on clear, distinct roles, noting that defined responsibilities make partnerships work more smoothly.
“For our example, I know that when it comes to finance, actioning anything to do with finance, insurance, property management, bills, maintenance, anything like that, my wife owns that space.
“From my side, it’s just three points: the direction of what we’re buying, when we want to buy, and the specific property and market we buy.”
Paliwal said that neither he nor his wife questions each other when they carry out their assigned tasks, and therefore, a sense of trust is formed between them.
“I think this mutual trust and diversion of roles or division of roles is really key,” he said.
Furthermore, he said that assigning roles ensures efficiency, meaning the couple is not held back from progressing in their property portfolio due to decision paralysis.
“The mistake I see is a couple that goes, ‘Well, let’s jointly make a decision on what we buy. Let’s jointly make a decision on when we get ready to go,” Paliwal said.
“Then someone compromises and someone carries a feeling, that’s about to pop out as soon as something goes wrong.
“Then decision paralysis. There’s all this stop, start, stop, start, left decision or right decision.”
Another piece of advice Paliwal gave to couples, is to set aside their pride and ego, resisting the urge to say, “I told you so” when something goes wrong in the property journey.
“That’s the biggest part, because then it doubts decision-making moving forward, it doubts trust moving forward.”
In a healthy relationship, he said, individuals are also reflective about their decisions and seek to understand what they could have done better.
“If my wife made a mistake on something with the insurance policies or something like that, I’m not going to go and [say], what the hell are we doing here? Why did we do it this way? I told you so.
“So you’ve got to eliminate that and let people be reflective and pick up their own things and go from there. Because you’ve given them that role, you’ve given them that trust. Let them learn it as well.”
Paliwal also encouraged couples to make rules for themselves, including financial restrictions, so they can avoid putting themselves and their families in trouble.
“For example, to avoid putting my family into jeopardy, I’m going to go, ‘Well, I have $25,000 per property in my portfolio as a buffer right before I go and take money out of a company’.
“I’m going to make sure I [don’t] go below three to six months of my bills in my company as a buffer.”
He said that if rules are in place, it’s easier for partners to trust one another and to have the assurance they can make more decisions in the future.
“It’s like, well, ‘Why not let him go and make the decision on that’ or ‘Let her go and make the decision on this’, because they’ve got rules in place to protect us as a family,” Paliwal concluded.
Listen to the full conversation here.