Tired of paying rent but don’t have enough cash or are too frightened to purchase your own place? Rather than let your single-income status keep you from buying the house of your dreams, consider the option of purchasing a permanent place with a friend. These days an increasing amount of unattached singles are pooling assets so that they can qualify for down payment and financing requirements when they can not afford do it on their own.
This new breed of home owner, referred to as “mingles” in some circles, consists of the widowed, the separated, the divorced, and the never married. And they are catching the interest of real estate mavens nationwide. Banks and financial institutions are also paying notice to the trend and agreeing to provide a mortgage to two or more friends who have agreed to purchase a property together.
No doubt, housing between friends has benefits, but it is not the sort of commitment that can be taken casually. Before entering this sort of platonic partnership, here are some helpful tips for you to consider, courtesy of Toni Haber, Executive Vice President at Prudential Douglas Elliman:
1. Evaluate the Alliance
Can a neat freak put up with a sloppy Joe? Does the energizer bunny want to shack up with the coach potato? When it comes to day-to-day living, we all have our own quirks, priorities, and skill-sets. While this can be positive in some cases, like a divvying up of household chores, it can also lead to irreconcilable differences among housemates. So before you make a joint investment, be sure to seriously weigh the pros and cons of living with your friend.
2. Carefully Communicate Commitments
When it comes to property investments, “going dutch” may not be an option. To avoid surprises and conflicts down the road, Haber stresses that it is important for both parties to have an open discussion about where they stand financially. House options, mortgage rates and contract terms will be contingent on each individual’s credit history, financial health and both short-term and long term obligations, so it is better to get this out in the open from the get-go.
3. Find a Reliable Realtor
A good real estate agent will do more than turn you on to the best places to purchases. “Look around,” says Haber, “for someone who has experience dealing with joint tenancy arrangements. Their insights will likely save you legwork time as well as hefty legal fees.”
