Can you buy a house with your best friend?

Thursday 25 Oct 2018

Buying a house is a priority for many of us, but our priorities don’t always dictate our future. The traditional approach is to wait until you are in a committed relationship, then buy property together, or if you are a young working professional, to buy an investment property on your own, until you move on to your next life stage. Both of these options are left somewhat to fate however – nobody can guess when they might meet a partner, or in fact if the relationship will last for the long term. Buying a property alone can also be expensive and overwhelming.

But many of us have the perfect solution right under our noses – our best friend! The one we shared our deepest secrets with, the one that we trust with our most personal thoughts and feelings. The best friend relationship in reality may be the strongest and most committed long-term relationship we will ever have. So why wouldn’t we buy a house with THAT person rather than a romantic partner? The pros far outweigh the cons and, given the divorce rate and the drama that comes with spouses co-owning property, choosing to buy a property with your best friend actually makes much more sense.

There are however some things to consider before you take the leap, to protect you both and to make sure that whatever happens, the property does not get in the way of your friendship, or your individual futures.

Take a test run

If you both plan to live in the home you buy together, then you should at least try to live together for a while first. Even the closest of friendships have been torn apart over unwashed dishes and unmatched expectations. Why not move into a furnished apartment on a 6-month lease as a test run? If you can find a place where the rent will match your anticipated mortgage payments, you can get a good sense of whether either of you can actually afford to buy, as well as feed yourselves and make the necessary sacrifices to be financially stable. Renting together may not be an option, but why not try to take a trip together, if you haven’t already? Travel is a great way to discover a new level of friendship, as both of you are put into various pressure situations. A week in a foreign environment, sharing a room and having to budget spending, and plan activities together, tests all the essential components of a friendship – patience, selflessness and, most of all, expectations.  

Lay your cards on the table    

Buying a property is a big financial commitment, not only because of the decades of monthly repayments, but also the responsibility for the ongoing expenses involved in running and maintaining the property. You and your friend should spend some time going over your finances, being as honest and open as possible about your own expenses, spending, savings and debts. This will give a true picture of each of your financial strengths and weaknesses. Drawing up individual budgets is a good exercise to learn exactly where your money goes. Knowing each other for what seems like forever, does not mean you have any idea about what each of you does with your money. Discuss what your current budgets are and how they will have to change to manage the new expenses you will both be committing to.  

Map out the future

Once you’ve decided that you can buy a house together, it’s important to plan ahead and have a clear understanding of what you both want and what your individual responsibilities may be. If one of your longer-term goals is to be in a relationship and start a family, then it’s safe to assume that will happen during the course of your mortgage. Sketch out what this might look like and be clear about how this will be navigated if and when the time comes. Maybe one of you wants to go travelling for a year, so together you’d need to think about how you’d make this happen. The best approach is to sit together and map out your hopes and dreams for the years ahead. Take some notes and sketch out some solutions, so that you can then get legal structures put in place to secure these decisions and protect you both.

You’ll also need to consider who is responsible for what, where the property ownership is concerned. Bills have to be paid regularly and a property needs to be regularly maintained to keep everything in good working order. Who will be in charge of calling tradespeople? Who will take care of the garden? Who will go to the body corporate meetings? All of these ‘jobs’ need to be considered and allocated in advance to avoid confusions and resentment in the future.

Cast it in stone

Once you have explored all the possible scenarios, a mutual investment in professional advice and structure is essential. Talk to a real estate agent and ask for a recommendation to a real estate lawyer who can help you draw up things such as a co-ownership agreement. This will clearly detail what happens if one of you wants out, if one of you dies or if the relationship deteriorates; plus both of you will need to update your wills. Creating a professional relationship out of your personal one requires a mature and objective approach. By setting up a joint bank account for expenses, outsourcing maintenance and putting direct debits in place for mortgage and bill payments, you can separate the business from the personal more easily. 

Buying a property with your best friend can be a fantastic experience - if managed well. It’s important to protect both of your personal and financial futures however and know also that the future is largely unpredictable. With precautions in place that anticipate most scenarios, you will both be able to reap the benefits of your shared investment, and experience a deeper level of friendship as you enter into a new kind of partnership together.   


The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.