It’s not always easy being able to afford a house. If you’re single, buying a house is a goal that may be out of your reach. With only one income, you could struggle to find a mortgage. But you shouldn’t have to rent for your whole life, just because you haven’t or don’t want to find a partner to live with. One thing that single people, or even couples, choose to do is the buy a house with a friend or family member. Some people even buy a property with a group of friends. It can be a great way to secure a mortgage and make owning a property a viable option when you can’t do it on your own. But is it really a good idea? Owning property together could put strain on a relationship. And if the relationship breaks down for another reason, what happens to the house? Consider some of these tips for buying property with friends or family, and how it works.
Pool Your Resources
Buying with friends or family makes home owning more affordable. On your own, you may not be able to afford to buy property, but pooling your assets could make the dream come true. If you’re getting help buying a house from a family member, they can get the tax benefits from owning a home. You should hire a lawyer to deal with the purchase and use estate agents in Hayling Island or your desired area to find a home.
Who Holds the Title?
The type of title on the property determines who can sign documents pertaining to it, and what happens to the property on the homeowner’s death. Joint owners can sign a contract as tenants in common (TIC) or as joint tenants with right of survivorship (JTWROS). If each of you has an equal interest in the home, the latter type of title applies. When one of the owners die, their share of the property goes to the other owner(s). With tenants in common, they may have equal or unequal shares and each has a separate legal title. Co-owners can each pass their share onto someone else in their will, so there is no right of survivorship. You can dissolve a tenancy in common by one person buying out another or selling the home.
Who Should You Buy With?
Although owning a house with your best friend is a lovely idea, you should choose based on their financial record, not how much you like them (although you should like them too). It’s a good idea to draw up a co-ownership agreement before beginning the process of buying a home. A co-ownership agreement is like the home owning equivalent to a prenuptial agreement. It may seem impersonal, but it’s important to protect the interests of everyone involved.
Even though you’re buying with a family member or friend, you still need to approach buying the property from a practical standpoint. There are benefits to joint ownership but if you aren’t careful, there could be major drawbacks too.