Buying Property with Friends or Family: Strategic Precautions
With property prices in cities like Brisbane continuing to climb, many people look at the traditional “save a 20% deposit on a single income” route and realise it’s more of a marathon than a sprint. Naturally, this has led to a surge in property co-ownership.
Whether it’s two best mates pooling their savings or siblings teaming up to get a foot in the door, the conversation often starts over a casual Sunday brunch. “Why don’t we just do it together?” It sounds simple, logical, and—most importantly—achievable. But while the shared excitement is a great motivator, buying property with friends or family requires more than just a firm handshake and a shared Pinterest board. It also takes a professional strategy to protect a personal relationship.
The Power of the Collective
If you’re wondering, “Can you buy a house with more than one person?" the answer is a resounding yes. In fact, it’s becoming a go-to strategy for those who want to stop paying rent but can’t yet bridge the gap alone.
Whether you’re buying a house with your friends or looking at how to buy property with family members, the benefits are clear: you have more borrowing power, you can share the ongoing maintenance costs, and you can often afford a superior location that would be out of reach solo.
However, the “how” is just as important as the “why.” You’ll need to decide on the structure of your joint property ownership in Australia. Most co-buyers choose a “Tenants in Common” arrangement rather than “Joint Tenants.” This is crucial because it allows each person to own a specific share of the asset, which is particularly helpful if you are buying a house with a friend using different deposits. It means if you put in 60% and your mate puts in 40%, your legal ownership reflects that exact contribution.
The What-If Scenarios: Planning for the Unexpected
When everything is new and exciting, nobody wants to talk about the potential downhill—the “divorce” of a friendship or a family rift. But as seasoned buyer’s agents, we can tell you that the most successful co-buying journeys are the ones that plan for the worst-case scenario on day one.
Is buying a house with friends a good idea? It can be, provided you’ve sat down and navigated the “what ifs” before signing the contract. Consider these common hurdles:
The Exit Strategy: What happens in five years when one person gets a job interstate or meets a partner and wants to move out? You need a pre-agreed process for how one co-owner of the property can buy the other out, or at what point the property must be sold on the open market.
The Default Dilemma: If one person loses their job and can’t meet the mortgage repayments, the bank doesn’t just ask for half the money—they want the full payment. Understanding your “joint and several” liability is vital.
Life Changes: Buying property with family or friends means your financial lives are linked. If one person wants to use their equity to start a business or buy another car, it affects the other’s borrowing capacity.
Beyond the Handshake: The Formal Checklist
While a text message confirmation feels easy, buying a house with another individual requires a more formal approach to survive the long haul. Think of it as a “pre-nup” for your property—formally known as a Co-ownership Agreement.
Firstly, you need to decide on the “House Rules.” Who pays for the lawnmower when it breaks? What happens if someone wants to renovate the kitchen but the other wants to save for a holiday? These aren’t just small disagreements; they can become significant friction points over time.
Secondly, consider your tax position. If you are buying an investment property with friends, the ATO will look at your legal interest in the property to determine how you claim deductions. Getting this right from the start avoids a messy conversation with your accountant three years down the track.
Buying with the “Bank of Mum and Dad”
We often see adult children buying property with their parents as a way to secure a future home or a high-growth investment. This is a beautiful way to build intergenerational wealth, but it brings its own set of social dynamics.
So, how to buy a house with family members without ruining Christmas dinner? By treating it like a business transaction. Ensure there is a clear distinction between a “gifted” deposit and a “loaned” one. You must also be transparent about who is responsible for the rates, the insurance, and the leaky tap in the middle of the night.
Why a Buyer’s Agent is Your Best Buffer
You might think, “We’re family, we don’t need a middleman.” In reality, that’s exactly why you do need one. When you are buying a house with a friend or family member, emotions can cloud your judgment. You might overlook a structural flaw because you’re both so tired of looking at houses, or you might disagree on which suburb offers the best capital growth.
A buyer’s agent acts as a neutral, third-party advocate. We help facilitate the professional side of this very personal transaction. We don’t just find the house; we also help you navigate the logic of the purchase. We ensure the property fits the investment goals of everyone involved, whether you’re buying an investment property or looking for a long-term home.
We also ask the hard questions: Is this floor plan flexible enough for two separate lifestyles? Does the zoning allow for future extensions? Are we overpaying because of FOMO?
The Final Verdict
So, can siblings or three friends buy a house together? Absolutely. Is it a shortcut to the property market? Yes. But it is a path that must be paved with legal advice and a rock-solid co-ownership agreement.
Taking a professional approach doesn’t mean you don’t trust your loved ones; it means you value the relationship enough to ensure it isn't burdened by financial ambiguity. If you’re ready to explore how to buy property with friends or family in the Brisbane market, let’s chat. We’ll help you find the right asset and ensure that your leap into co-ownership is a strategic success, not a stressful surprise.