Buying a home with a friend is a very serious decision. If homebuyers go into this partnership without thinking long and hard about the pros and cons of their decision, they could end up saying goodbye to their close friendships, and hello to foreclosure of their newly purchased home.
Homeownership with Friends --The Pros
Combining incomes helps homebuyers qualify for a bigger loan, which means they could purchase a home they might have otherwise never had the opportunity to consider. Sharing the costs of a mortgage, repairs, and bills puts less pressure on a homeowners' wallet. Partnering in a home purchase with friends could make buying a home a reality for people who would never have thought they could own a home.
Purchasing a two-family home with a friend prevents buyers from having to be landlords. Both parties have the freedom to live in their space without the added headache of having to interview renters.
Friends who become co-owners can sometimes form an even stronger bond. If both parties take great pride in their home, it can build a greater sense of community. Sharing a home with friends also makes for great barbecues, house painting parties, and extra fun during the holidays.
Buying a home can be very stressful. Jumping into this process with close and trustworthy friends can turn this stressful task into an exciting adventure.
Homeownership with Friends -- The Cons
While a partnership with friends allows homebuyers to save money, it can also leave co-owners open to big financial headaches. If one party runs into money trouble, the other party will most likely have to fork over money to avoid late fees and foreclosure. This could lead to bad credit and bad feelings between friends.
A house is a big purchase to make, and one of the biggest loans most people take. Tying yourself to a friend in this way can leave homebuyers very vulnerable, very broke, and very angry.
If one buyer is sloppy and the other is not, the tidier partners might find themselves doing some extra cleaning. Different living styles crammed into one home can be disastrous. If friends and business partners can't establish good communication and ground rules in the beginning, co-owing a home is definitely not a wise decision.
Remember that you are partners as well as housemates. If you have to share common areas such as hallways and yard space, disagreements on color choices and houseplants could lead to fights. Consider everyone's personal design styles. If the partners don't think their styles can mesh or that they would be open to compromise, reconsider this living arrangement.
While it's nice to be a homeowner to save money and to build a community of friends, co-owning could lead to a loss of friendships. As with any business arrangement, think long and hard before you make a decision.
Buying a home with friends has many pros and cons. Homebuyers need to consider the ways they will most likely benefit from this partnership and make the decision that works best for them.
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