Blog Articles

27 Sep

Home co-ownership - could it work for you?

Would you buy a house with a complete stranger?

A new property 'speed dating' concept is pairing people up to do just that.

Home co-ownership - could it work for you?

Miuwi (think me+you=we) brings people together to share costs and get their combined feet on the property ladder. Much like a dating app, you sign up and an algorithm analyses your profile to find a co-owner 'match'.

A 'Tinder' approach to home buying, if you like. While this might be a step too far for some, the concept of co-ownership is not a new one. From a group of friends pooling their resources to buy an investment property, to a home with a 'granny flat' attached for an elderly parent, co-ownership can help people achieve their property goals faster, while spreading financial risk.

For example, this beautiful Welcome Bay home at 272 Ballintoy Park Drive, with a one-bedroom flat, or this Matua home at 60 Tilby Drive, which we recently sold, with a self-contained 2-bedroom flat, are both ideal for an intergenerational-ownership scenario.

With house prices out of reach for many first home buyers, I think we're going to be seeing a lot more of this co-ownership trend.

But, whether you are buying property with family, friends or a complete stranger, it's important to make sure you have the same objectives in mind. And a watertight legal agreement in place - a property 'pre-nup' that protects all parties.

For instance, if one of you is thinking of a quick 'do-up and sell', while the other is in it for the long haul, you are going to run into problems. You should also consider partners. For example, if two married friends buy a property together, they need to bear in mind that there are four people in the metaphorical 'room', not two.

Any co-ownership agreement should have clearly defined exit strategies and cover things like divorce and death.

As a starting point, here are some questions you might like to think about:

  • What shares will you each have in the property? How much deposit will you each pay? Will this be reflected in ongoing payments?
  • How will you structure and manage mortgage payments? What happens if someone defaults on their share of the payments?
  • Who will pay the rates?
  • Who will live at the property? If it's a rental property, who will manage the tenants?
  • Who will be responsible for maintenance and/or improvements to the property?
  • How will you resolve any disputes?
  • What happens if someone wants to sell their share?
  • What happens if one of the co-owners passes away or becomes incapcacitated?

Whether it's a first home, or a superannuation fund you've got your sights set on, co-ownership offers possibilities that you may not be able to achieve on your own. It's definitely worth considering, just make sure you do your homework and seek sound legal advice before signing on the dotted line.

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