Thank You For Being A Friend
All my friends out there renting, this one’s for you...
You’d consider buying a home with a spouse, boyfriend, girlfriend, or partner, right? So why not consider co-owning with your best friend? Here are the top four reasons you should look into homeownership with your besties..
1. It’s easy to get qualified.
Instead of basing the qualification on one income you’re basing it on both. You can both split the down payment, closing costs, inspection fees, appraisal fee, and survey fee; minimizing the impact on you both financially.
2. You have a lot more flexibility.
You have the freedom to do what you want with your home*. Feel like earning some extra income by hosting an AirBnB? Sure go right ahead! Want a fur-ever home for your four-legged babies? Say bye bye to pet deposits and fees. Are you longing to live out your HGTV dreams? Remodel that kitchen baby! Seriously, homeownership opens up a world of opportunities.
We already plan for the future by saving for retirement and investing in stocks- homeownership is just another way to increase your gains! Every time you and your friend make a mortgage payment the more equity you gain. That, coupled with the steadily increasing home prices, you’re almost guaranteed to walk away in a couple years with cash in your pocket when you decide to sell. Remember, even though you’re signing a 30 year mortgage, most homeowners sell before 10 years. So when you and your buddy part ways and split the proceeds from the sale, you can use that money towards a down payment on a place of your own.
4. You save money.
The most obvious way you save money is by not throwing it away on rent. Aside from that, not only are you splitting your mortgage payment with someone but now you’re also saving on utilities and renovation costs. Since you both have a shared interest in the home you both can share the costs associated with upgrading the home. These upgrades can also increase your equity, it’s a win-win.
Now you might be thinking it’s a good idea if but why don’t more people do this? Well they do! I consulted with my local lender, Sean Despaquale with the Mortgage Firm to see if he’s had any positive/negative experiences and he just happened to have done a deal like this a year ago... Sean told me “ In December of 2018 I pre-approved Steve in Orlando. Steve was 22 years old and worked at Disney. Based on Steve’s income alone we were not able to qualify him for enough of a mortgage. However, when we added Steve’s room mate Austin, who also worked at Disney, we were able to combine the two incomes and qualify them for a FHA mortgage. They wound up purchasing a home in Orlando priced at $215K and only had to come up with about $3500.00 each. The mortgage payment was $350.00 less than they were paying rent, plus the home had a 3rd bedroom which they rented out to another room mate for $500.00 per month!” Sean went on to say “In short, this is a very smart, creative way to purchase a home!”
As you can see, your down payment is right around what it would cost you to move into a rental and you could receive positive cash flow every month. Just think what you would do with an extra $400/month; pay off your student loans, save for a big vacation, invest more in your 401k/stocks, buy a new car! They say money makes money. Besides buying a home, name one other way you’re going to get a loan for 200k+ so easily.
I could get off topic and write a whole blog about the importance of buying a home period, so I’ll stop right here.
Friends should support friends, so buy a house together.
Thank you for reading!
Let me know if you have any questions about this concept or just home buying in general. Having bought my first house at 22 I can relate and know the process from a buyer and agent perspective.
*Condos/townhomes may have rules that restrict rentals, pets, exterior appearance, and interior appearance. This info is easy for me to find out so just let me know if you have any questions about this!