“Amid fast-rising home prices, living costs, and student debt loads, many millennials and other cash-strapped buyers have found they’re not able to buy on their own. But they don’t want to rent forever and miss out on gaining equity in property, either. So, some have found a workaround to the housing affordability crisis: banding together and pooling resources to come up with the down payments and closing costs that make homeownership a reality.” writes Pamela Ferdinand for realtor.com.
Home ownership is a natural next step for many millennials – this generation has grown up in houses owned by their parents. But these days, without at least two incomes, buying a house is just not affordable..
Enter co-buying. Instead of barely scraping together enough cash to put a downpayment on a tiny apartment or a dilapidated house, friends and family are sharing the costs of buying larger more comfortable houses in better neighborhoods. Buying with others has its benefits:
- You can invest in real estate at a fraction of the cost you’d expect to pay if you were buying on your own.
- You can build equity.
- You can save faster and qualify more easily for a loan by combining two (or more) incomes.
- You can share the burden of mortgage payments, utilities, property taxes, maintenance and repair costs.
As well as these financial benefits, you’re becoming part of a community, seen by some as a panacea for growing social isolation and loneliness.
Although co-buying is still relatively rare, according to research by the National Association of Realtors®, the trend is growing fast. There are already organizations poised to help co-buyers work out their arrangements and some that offer down-payment finance in exchange for a share of the home equity.
It’s a big idea, and big ideas have challenges. There are plenty of issues to consider. For a start it’s essential to do plenty of research and draw up a comprehensive agreement about rights and responsibilities of each owner as well as clear exit strategies in place.
But when it works, it’s a beautiful thing. Kelsey Perkins, a happy co-buyer from Denver says “What we could do collectively was much more than we could do individually.”
See the original article here.
Image by Michelle Picker – a derivative of 3 images. All original images licensed CC0 Public Domain