Buying a house with a friend or relative

Buying a house with a friend or relative

Traveling, starting a podcast, and running marathon are just some of the things you can do with your friends. But how about buying a house with a friend? Most people turn to this “hack” to make it more affordable to invest in a house.

Combined dynamic real estate markets and the issues of affordability in major cities has led to the growing popularity of families, unmarried partners, relatives buying a house together. But when two people who are not legally related buy property together, things can get a little turbid.

Before you dive into a joint contract, here are some of the few things you should consider:

Think about who’s name(s) are on the mortgage

The hardest part of buying a house together is financing. You’ll have to determine whether one of you or both will apply for the mortgage.

Keep in mind that if you want to apply together, you will both need to prove your credit history and enough revenue to be accepted.

You might want to consider putting only one name on the loan if one of you had some financial losses

It’s important to discuss how you will split the payments ahead of time to avoid any conflict later on.

Consider a property ownership agreement

Even if you’re in a beautiful relationship with the person with whom you buy a house today, there’s no knowing what’s going to happen in the future. Hence, having a plan in place that will decide what should happen if conflicts arise is important.

Consider establishing an ownership agreement between the two of you, which is a legally binding document.

Choose the right form of ownership

When you buy a house, the deed will include both the owners ‘ names as well as the type of ownership you have chosen. This will dictate how the property rights will be treated legally, so you’ll want to be sure of selecting the form that suits the relationship better.

Here are your options:

Tenancy in common: This is the most popular option for non-married co-owners or those intending to contribute different amounts of money.

In this case, you are both the legal owner of your shared property. However, for each person, the percentage of ownership can be different. If one of the tenants passes away, the beneficiaries receive their portion of the land, not the other owners.

Joint tenancy with right of survivorship:

This is most popular among longtime partners. This just like tenancy in common; the only difference is, if one of you dies, the remaining owner transfers his or her share.

In this case, other beneficiaries can not inherit the part of the house held by the diseased. Here the profits will be split equally between the two owners if you sell the house.

Remember other homeownership costs

Buying a house together with means so much more than getting through the cycle of escrow and closing. Both will also be the home’s co-owners and will be responsible for their daily maintenance.

Sit down together, and speak frankly about how these specifics should be handled. Discuss how you’re going to split up buying items like home decor, who’s going to be responsible for what ongoing tasks, and how you’re going to take care of any unexpected expenses that may arise.

Final thoughts

Buying a house together with means maintaining a transparent and truthful relationship with your investment partner. Do your best to hold these frank conversations in advance and address any questions you might have.

The bottom line is, both of you should be completely comfortable before entering into a legal and financial arrangement, even if it’s someone you’re emotionally involved with. A good REALTOR® can aide you make the right offer for the property you’re interested in buying. For free valuation, contact us at 401-396-2888. We’re always glad to help!

Need an accurate home evaluation?


Kamil Sarji - Real Estate Agent


Kamil Sarji

Real Estate Agent

Licensed in Rhode Island, Massachusetts, and Connecticut

Phone: (401) 396-2888



If You're Selling: I know how to present and showcase your house effectively, promote and market it so that it attracts qualified buyers and get SOLD for the highest price possible.

If You're Buying: We start with really learning about your needs and what you're looking to achieve in your new home. Knowing this will help me find and show you the best homes that meet your criteria.


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