Four Things To Consider Before Co-Buying A Home
If you and a friend are considering co-buying a home to beat the high cost of housing, you need to be very careful when you discuss how the co-ownership will work. The idea of co-ownership can sound wonderful at first, especially if you really like the person you're going to buy the home with. But reality can be a lot different, especially as years go by. Here are four things to consider before buying a house with friends.
Type of Ownership
Co-buying isn't as simple as just putting down half of a down payment and giving half of the mortgage payment to your housemate. You have to decide if you and your friend want to have a joint tenancy, be tenants in common, or form a limited liability company. Each has legal consequences that affect how ownership is transferred if someone dies or decides to sell his or her share of the house. This is not something that's easy to change, so you and your friend need to think this over now, before any offers are made.
Rent or Stay
As the years go by, are both you and your friend going to want to stay in the house, or rent it out? You need to have a common plan that you both want to stick to. It can be difficult if one person decides to leave and wants to have a stranger staying in his or her place.
Other Occupants
You and your friend need to decide what to do if one of you gets married and wants the spouse to live in the house, or if one of you has children. If you're envisioning living in the house with just your friend, realize that may change drastically, and you need a plan regarding what to do if that changes.
Repairs and Additions
Do you and your friend have a long-term plan for keeping up the house? Are you going to have a common fund from which you'll pay for repairs? Think about how you and your friend will handle these things because repairs will eventually be needed, and you may decide later to remodel or add on to the house.
If you want more advice regarding co-owning a home, talk to real estate agents who have helped people co-buy before. You need to approach this carefully, but if you do, you can have a great experience buying and owning a home.
Share