Buying a house with a friend-Is it a good idea?
Buying a house with a friend sounds like a good idea at first. But is it really? Sure, two wallets (or bank accounts in this case) are better than one, living with friends can be lots of fun, and it’s a way to start a fun new life away from your parents but not alone. And there are certainly advantages to taking this route to homeownership. But things are never as simple as they seem. Despite many benefits, getting a house with a friend also comes with some serious downsides. The real question, then, is: do the positives outweigh the negatives? The answer lies in examining the pros and cons of home co-ownership with friends.
You could buy your dream home with the help of a friend.
Pro: you’ll have a bigger budget when buying a house with a friend
One of the biggest problems with buying real estate, especially when you’re buying your first home, is how much money you have to invest. Unless you’re a celebrity or a receiver of some significant inheritance, you’ll need to get a loan from a bank. Even then, you probably won’t have nearly as much as you’re hoping for. In fact, most people end up buying their first home later in life or settling for something smaller and less perfect than what they really want. If you combine strengths (and finances) with a friend, however, that doesn’t have to be you! You’ll have a bigger budget when there are two of you. And then perhaps you won’t have to sacrifice a safe and clean neighborhood or extra square footage. You can both have the house of your dreams right now because you’re buying it together.
You could buy your dream home with the help of a friend.
Con: both your credit scores will be examined and affected by the investment
The biggest benefit of buying a home with a friend is, however, also a hidden flaw. When you’re both buying the home, you’re both involved in the process. This means you’ll both be on the mortgage which in turn means the bank will examine both of your credit scores. Even just one person’s negative credit score can change your interest rates and affect both of your financial situations.
Pro: sharing expenses makes it easier to deal with
When you’re young and are just getting your first home, budgeting is going to be hard. You’ll have to pay for a good local realtor, some excellent movers, any renovations needed around the house, and all that on top of utilities and groceries, and all the regular expenses. It’s completely overwhelming! But much less so when you have someone to share the burden with. If you’re buying a house with a friend, you’ll be sharing at the very least the expenses surrounding that house and the move to it. This will make them much easier to bear.
Con: buying a house with a friend will tie your finances together for the foreseeable future
Once again, shared finances are a double-edged sword. Things could start out great with the two of you splitting the moving estimate you get from www.getmovedtoday.com evenly and both paying your fair share only for things to fall apart three months down the line when you realize your friend can’t afford to participate in the electricity bill. Because that’s the thing with tying up your finances with someone else’s: you’re in it together, for better or for worse. It’ll be great when and if it works. But you’ll depend on your friend to hold up their end of the bargain. And what happens if they can’t?
You’d better be ready to tie yourself financially to your friend for a while if you’re going to buy a home together.
Pro: you get to share your life with a friend
There are plenty of reasons to move to Tennessee, but young people are still hesitant to do it. This is often because moving out of your parent’s home and starting your newly free and adult life is exciting yet terrifying. Many young adults struggle to juggle house chores, work and school, social lives, and relationships when they first start living on their own. If you live with a friend, however, you’re already ahead of the curve:
- you have someone to share responsibilities with so you don’t have to cook and clean all by yourself which leaves you with more free time
- your friend lives with you so you always have someone to come home to and hang out with
- making plans is easy because you can always find your friend at home and discuss it
- you have moral support that you can rely on right there in your own home
So living with a friend instead of alone can be a great advantage!
Con: buying a house with a friend may test your bond (and there is no easy way out)
There are, however, downsides to living with friends too. Just because you get along well with someone when you can feasibly escape into your own space without them doesn’t mean you can live with them 24/7 with the same ease. That level of closeness is bound to cause some friction. And there will be a lot of things to argue about.
Disagreements over responsibilities, finances, and lifestyles
Living with someone means learning about all their worst habits. When you haven’t spent extended periods rooming together with your friend, you won’t know if they leave dirty dishes in the sink for days or don’t shower for a week, or bring people over in the middle of the night. Worse yet, you won’t know if they remember to pay the bills on time, if they recklessly spend money and end up broke at the end of the month or if they need to borrow a lot.
You may end up arguing with your friend a lot more than you expect.
And although conflict between friends can be a good thing, frequent fights (especially when they are consistently about the same thing) will surely affect your friendship negatively. The worst part? When you own a house together, it’s not that easy to walk away. It takes a lot of time and effort to untangle that kind of connection.
Possible solution – make it formal
One way to avoid disaster is to make things formal from the beginning. Outline your respective responsibilities in a contract in a way that both you and your friend can agree on. You can have a legally binding contract for the financial aspects of buying and owning a house and a less formal one for chores, obligations, and rules about living together. If you choose to take this route, make sure that your agreement details how you can go your separate ways in case it comes to that.
Conclusion: is buying a house with a friend a good idea or a reckless mistake?
Finally, the question remains: is buying a house with a friend a good idea or not? And the answer is that it depends. It depends on you and on your friend, on your relationship, and on how you handle living together. Sometimes, things work out great. Other times, not so much. It’s up to you to decide if trying is worth the risk now that you know all the pros and cons.