Home ownership is a pretty common goal among adults, if you already have a primary residence maybe you are looking for a second home or investment property. However, what if you can’t raise the funds and/or cover the mortgage on your own? A new real estate trend of purchasing a home with friends is making home ownership a reality for more people. But is it a good idea?
A recent article in The New York Times cites that home buying with friends is becoming increasingly popular in major metro areas where home prices are soaring, like New York City and San Francisco. Bringing resources together creates a larger down payment than one person could make, or even makes a cash payment possible.
This real estate trend is not limited to single millennials – couples, families and baby boomers could benefit from it. If you are thinking about trying this new trend out look for homes that offer private guest quarters, such as a detached casita with a private entrance.
In addition to the lower initial expense of purchasing the home, you could also reap benefits of saving on utilities, cable television, internet and Home Owner Association fees. You also may feel more secure knowing other people are nearby, especially friends you trust and when you head out of town with your own space left empty for a short period.
For vacation homes, sharing with friends is a great way to split up the costs without actually having to share space at the same time. You can schedule visits around each other and even consider renting out the home.
Of course there are the downsides to this real estate trend as well. A legal agreement should be drawn up between the parties involved to outline who is putting what money in, percentage of ownership and usages, how profits are divided (investment properties), etc. These kind of agreements can get tricky with friends and even put a strain on the friendship when uncomfortable topics come up. If you all will be on a mortgage, you need to be prepared to get down and dirty with all your finances to qualify.
Interested in joining the real estate trend and going in on a joint venture for a golf home? The Matheson Team can help everyone involved every step of the way, from finding the right property that fits your needs, to helping to find a mortgage broker who can keep you organized.
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The Matheson Team – RE/MAX Fine Properties
21000 N. Pima Rd., #100, Scottsdale, AZ 85255