Co-buying a home

Friends 1

Think of your siblings, or perhaps your closest friends. Could you buy a home with them? As in, have permanent, legal roommates?


This is a new trend, mostly among millennials who are finding themselves priced out of hot housing markets. In Toronto, for example, where the average house price is moving close to $800,000.00, many people are looking to alternate arrangements instead of settling for a condo. Co-buying allows them to afford a house, maybe even a detached house, when alone they wouldn’t have the income to support it.


There are some definite dangers to consider. First, how well do you know the finances of your co-buyer? How secure is their employment? How good are they at paying their bills? Some people with good incomes simply forget, or choose not to pay certain bills. If your co-buyer doesn’t pay their share of the mortgage, however, you could lose your house.


Most importantly: what happens if your relationship breaks down? This is not an investment partner; this is someone who will live with you in your house. Especially if you don’t have separate entrances, you will be seeing a lot of this person. Do they leave dirty dishes in the sink or dirty socks on the floor? Do they have a noisy pet, or a young child? Do you? What happens if one of you wants to sell and the other doesn’t?


Co-buying has the potential to help you into a really hot market, but there are a lot of possible issues. If you are thinking about it, you should definitely have a written contract with your co-buyer that sets out all of the possible issues and how they are to be resolved – and you should do this before you buy.