Buying a Home with Friends or Family: Smart Strategy or Recipe for Drama?
Should You Buy a Home with Friends or Family?
In today’s market, many buyers are finding strength in numbers. Whether it’s teaming up with your sibling, your best friend, or even your adult child, co-ownership is becoming a viable path to homeownership—especially in higher-cost areas like Colorado. But it’s not a decision to make lightly. Here’s what to know if you’re considering buying a home with family or friends.
Let’s face it—housing affordability isn’t what it used to be. High home prices and interest rates can make it difficult for a single income to qualify. That’s why we’re seeing an increase in buyers pooling their resources. By combining incomes, assets, and credit profiles, co-buyers can:
This strategy can be especially helpful for:
Some homes are more co-ownership-friendly than others. Here are a few options that work particularly well:
1. Duplexes or Multi-Unit Homes
Ideal for co-buyers who want separate living spaces but shared ownership. Each party can live in their own unit, maintaining privacy while splitting ownership responsibilities.
2. Homes with Accessory Dwelling Units (ADUs)
An ADU—like a basement apartment, backyard cottage/ inlaw suite, or converted garage—can offer separate living quarters for a second household while sharing the main property and mortgage.
3. Larger Single-Family Homes
With enough bedrooms and bathrooms, a spacious single-family home can comfortably house multiple occupants under one roof. Consider homes with multiple primary suites or finished basements for added flexibility.
4. Investment Properties
Some buyers co-purchase a property they don’t intend to live in, opting instead to rent it out and split the profits. This is more of a business arrangement and may require additional legal protections.
Co-owning property is a serious commitment. Before moving forward, ask yourselves:
These answers should be discussed in detail and documented in a written agreement drafted with help from a real estate attorney.
Most lenders allow multiple borrowers on a mortgage, and all parties’ credit scores, debts, and incomes will be considered during the loan approval process. It’s important to note:
Here are a few smart steps to take when entering a co-buying arrangement:
Buying a home with someone else can be a powerful way to break into homeownership, especially in a competitive market. But it’s not without risks. Open communication, clear expectations, and the right property can make all the difference.
If you’re considering this route, reach out. We can walk you through the financing options, help evaluate your buying power, and make sure everyone is protected and set up for success.
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