Home Company Blog
Buying a Property with Family or Friends: What to Think About.
By: Khalid Sarwari
October 13, 2021

Have you ever looked at property prices across Melbourne and wondered if the great Australian dream will always just be a dream?

What if you didn’t have to do it by yourself?

One way is to team up with family members or friends to buy a property.

This way, you can own a share of a home you wouldn’t be able to afford by yourself.

However, there are quite a few things to take into consideration if you are going to buy a property with family or friends.


Being friends or family members is not the same as being housemates.

It is recommended living together before you went all in and bought a property together.

Rent with that person for six to 12 months to see if you can handle living with them.

If one person was a clean freak and the other a slob or if one person smoked and the other didn’t, it might not be a match made in heaven.

It is better to find this out before you are in debt.

It is important to set up house rules regarding partners, guests, pets and smoking before moving in.


Putting an agreement together when buying with family or friends was a way to protect yourself down the track.

Work out what happens in the event that one person wants to sell. Does the other person get first dibs, but if they can’t agree on a price, do you have to sell? It is all the little things you might not think about.

It is important to get a cohabitation or co-ownership agreement that outlined details and set out obligations and roles in advance.

Take out a term life insurance policy on each other, draw up a will and keep adequate records and finalise the mortgage structure with a joint loan, whether it is 50/50 or a per cent basis.

Also make sure you were tenants in common, otherwise your share passed to the other if you died.

Do your research on potential property partners.


Banks will go through all your financial details before approving a loan , I recommend you do the same to the person or people you were buying with.

You should do a full check on your property partner.

If one person defaults on a mortgage, others are liable and it will affect their credit rating.

You need to think of the property partnership as a business agreement.

Go ahead if you think it will go the distance but I wouldn’t do it if it is a rocky relationship.


Instead of buying a property with friends or family to live in, some partnered up when buying a holiday house.

Some people bought a holiday house with friends to justify buying a place that didn’t get used enough.

Often when people have bought a holiday house for themselves, they rent it out to justify spending that much, if you go halves, you might not have to take out as big a loan.

He said renting out a holiday house also meant you couldn’t use it whenever you wanted and it always had to be ready for guests, so buying with friends could be a smart idea.

Get a legal agreement put together.


Buying with others can be the right strategy as long as you knew the risks.

It can get you into more expensive suburbs and nicer property, more inner-city than outer housing estates.

Treat it like a business and agree on your goals from the outset and have a shared understanding of your plans in the partnership.

He said it could be well worth it financially as a loan split between partners meant you could pay it off quicker.

The way prices had gone up over the years, it was a way for people to get into the market.

It is getting more common for parents to purchase property with their kids to get them on the road to owning property.

There are a lot of things to take into consideration when buying with friends or family.


● A bigger deposit and pooled resources provide more buying power.

● Shared monthly expenses including utilities and maintenance.

● Home equity gains by making more mortgage repayments and reducing interest payments.

● Reduces individual financial burden with upfront and ongoing costs.


● Difficulty moving if disagreements occur, you might need to sell the house or refinance.

● Potential credit score damage.

● Difficulty qualifying for other loans as you have liability for the entire amount of the loan.


Social Share
Written by
Khalid Sarwari
Khalid Sarwari brings a much sought-after highly ethical and determined approach to his clients real estate needs. His diverse...
Looking for a dream home?
We can help you realize your dream of a new home
Explore Properties