Has anyone ever done this? Was it successful? A local realtor in our area keeps pushing this for first time home buyers. But of course realtors want people to buy, thats their business.
I think this 100% is a terrible idea.
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Perhaps if the house is in Miami and has a refrigerator full of cheesecake.
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If you are considering doing this, you definitely need a solid and carefully thought out contract that specifies what will happen when (not if) you have a difference of opinion regarding what to do with the house. At some point for example someone might want to sell and/or leave, and someone else might not.
Houses need maintenance. There are at least three issues to think of. If one of the owners does the maintenance themselves, will other owners put in effort in some other areas? If you hire someone to do maintenance, who deals with the contractors? Who pays? What if you disagree regarding what work needs to be done, or which fix to select for any particular problem? What if one person or one couple end up being neat freaks, while the other person or couple end up being relative slobs?
Mostly to me this sounds like a way to lose a friend and gain a headache.
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Never in a million years. What could possibly go wrong?
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Ask the realtor how many houses he’s purchased with friends and how that’s working for all of them. Tell him you’d like to talk to these happy friends who have bought homes with him
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No experience with houses but some with camps. There’s always some tension or drama with who fix’s more, who cleans more, who helps more, who buys more groceries, etc.
Terrible idea.
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Think how irritated friends get when deciding how to split a check at a restaurant? This is signficantly more $$$, and a billion times more stressful and aggravating.
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A friend of mine did this with her best friend of 30 something years. It was a disaster and they no longer speak to each other.
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We were given the option of owning common property with family members, at no cost (it was placed in a trust for the family). We declined. And we are glad we did. I can’t imagine owning any house and the decisions financially that need to be made with anyone but my husband!
And what happens if one family wants to sell their share?
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I’d rather be a tenant or landlord with a friend than a co-owner. The responsibilities are much more defined.
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I rented my first house to friends for about 10 years before I sold it. But they were people I had known for a LONG time. One of them was the eventual buyer of the house. We never considered owning the house along with them…and frankly, never would have done so.
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Sounds like a recipe for disaster to me.
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A friend and I considered doing thiz about 30 years ago. We didn’t in the end (becauseof somethingaboutthe property, not the headaches of co-ownership) but both of us are very practical, business-y types, and some of the things I recall that we talked about having in a contract were:
Not buying a fixer-upper - too much stress at the outset
Annual budget/fund for maintenance, repairs, cleaning.
Agreement on guests
How to manage one of us leaving – realistically, probably sale of property. Buyout possible, but valuation complicated, and sale to a third party seemed problematic for the “stayer”.
On the flip side, it was a way for both of us to have equity in a rising and expensive market. And in the case of this property, a way to have a place in a location that lacked nicer rental properties.
I’ll add that shortly after that, a friend bought a bigger place than she needed and I became a tenant roommate. It worked well for both of us, but I didn’t have equity, so had that been a goal, well…
I’ve thought it WOULD be nice to live with my BFF of 50 years at some point (chances are high I’ll be a widow since DH is almost nine years older than I am and doesn’t have great genes in his family). She never married so I think she might be open to the idea. But I agree, I wouldn’t co-own anything with her.
No way unless it is a rental property(ies) and with partners of substantial wealth (they can afford to lose it all). Then it might make sense to minimize the capital outlay or diversify the risk if you can now buy multiple properties. I’d even consider a vacation type property where the co-owners get X weeks a year. In both cases, I wouldn’t do it without a competent management company. Also the mechanism for new capital and major decisions need to be spelled out in the partnership/LLC agreement. Also critical are exit provisions, things like rights of first refusal, tag along (if one party sells, the other has right to also sell at the same terms or can buy out the other on the same terms), drag along (if one party sells, that party can force the other party to sell unless that party buys out the selling party on the same terms) or a straight buy/sell (one party can offer to buy out the other party and the other party can choose to buy out the first party instead at the same price). Always a assume there will be a parting of ways, so get that fully gamed out.
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My parents were both southerners, so there are/were lots of empty “home-houses” in the family. Renting one from one of my cousins nearly 25 years ago as a second home was one of the best things I’ve ever done. Gave me a place to stay for weddings and funerals and a reason to rekindle childhood friendships.
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Not quite the same, but my friend bought a house with her fiancé over 20 years ago, at a not so good time in the housing market. They broke up a year later. They still live together, he’s been hoping to sell for years, she can’t afford more than a 1 bedroom condo in the area on her own. I think they’re going to have to sell soon, he has a job offer out of state.The house is 10 minutes away from her state job (she’s been there for 35 years). They truly dislike each other.
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Story time.
We were approached by BIL & SIL (SIL is my DH’s sister) about 5 yr ago asking us to consider going in with them to buy AIL & UIL’s (DH & SIL’s aunt & uncle) mountain cabin, which is located ~ 2 hr drive from where BIL, SIL, AIL & UIL live. BIL & SIL couldn’t afford the mortgage payments on their own. Their grand plan was we were all going to rent the place out regularly on AirBNB & VRBO in order for the mortgage & upkeep to be paid.
DH & I live about a 7 hr drive from the cabin location.
BIL is very…hard on things he uses & owns. His & SIL’s house has not been properly maintained over the years and is now kind of a dumpster fire. They even had a small fire at their house a few years ago because of BIL & SIL’s foolish decision involving:
- not upgrading all of the electrical in the house to be grounded wiring
- plugging a full size refrigerator (BIL’s beer fridge) into an outdoor power outlet
- removing the overhang/cover on the side of the house that was covering the fridge & power outlet
- not unplugging the fridge when it rained cats & dogs
Could BIL & SIL afford to pay their half of a mortgage for the cabin in the woods? No.
Plus, they would have been the ones to use it most of the time.
So we said no thanks. And a couple of years later, the mountain town that the cabin is in announced that they were going to phase out short term rentals. So there would have gone all of the income to pay for the cabin anyway. From our point of view, we totally dodged a bullet there.
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Absolutely yes to this. The rules in most states (not sure about Louisiana, which has a code based on civil law as opposed to common law) allow for anyone who is a joint owner of realty to file a lawsuit for partition (i.e., sale and division of the realty or the sale proceeds); and at least in my State, you don’t have to give notice to any joint owner prior to filing a lawsuit for partition, or give anyone the right of first refusal – unless there is some sort of prior agreement to do so.
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