Pros and Cons of Buying House With A Friend

Pros and Cons of Buying House With A Friend

Considering buying a house with a friend or multiple friends? The prospect of shared homeownership can be enticing, offering the opportunity to split responsibilities, split mortgage payment, save money, and significantly boost purchasing power.

However, it's important to weigh the pros and cons carefully before diving into this big financial commitment -especially with a friend or even family member. From dividing responsibilities and mortgage payments to navigating legal agreements and potential risks, living with friends as co-owners can be tricky at the very least.

In this blog, we'll explore the advantages and drawbacks of purchasing property with friends, examining everything from financial contributions and ownership terms to maintenance costs and what it might do to the friendship. Whether you're considering an investment property, primary residence, or vacation home, understanding the complexities and implications of co-ownership is crucial for achieving homeownership while maintaining healthy relationships and financial stability. Without further ado! Here are a few pros and cons you should consider.

Joint Mortgage Payments

When it comes to friends purchasing a home it can be a smart move for many, allowing you to combine incomes and share costs. But it's not all smooth sailing to get a house with a friend.

Before you jump in, ensure you're on the same page about finances, responsibilities, and legalities. Craft a solid written agreement covering ownership terms, mortgage details, joint tenancy rules, homeowner equal property shares, mortgage insurance plans, property type, and more.

With the right approach, buying a house with friends can be a shortcut to homeownership while spreading the financial load. That way you can still have stable finances through the combined income of the other owner. Below is a list of the pros and cons of buying a house with a friend.


  1. Shared Financial Responsibility: As is the case with renting together, splitting the mortgage with a friend can ease the financial burden on both parties, making homeownership more affordable for each individual. Even the down payment and closing costs can feel less intimidating with both incomes.

  2. Building Equity Together: Owning property together allows both friends to build equity in the home, potentially leading to financial gains in the future if the property appreciates in value.

  3. Support System: Having a friend as a co-owner can provide emotional support during the challenges of homeownership, such as repairs or financial setbacks. If you need a shoulder to cry on your best friend will be there.


  1. Financial Disputes: Disagreements over mortgage payments, property maintenance costs, or future plans for the property can strain the friendship and lead to conflicts. Tough conversations are often necessary and if you aren't good communicators the strain could be more than you bargained for.

  2. Risk of Default: If one friend is unable to make mortgage payments, avoid paying, or defaults on the loan, it can negatively impact both parties' credit scores and potentially lead to financial loss or even foreclosure. One owner will be left holding the responsibility. If you have low risk tolerance, this option may not be the one for you.

  3. Unequal Contributions: Differences in income or financial stability between friends may create resentment if one person feels they are contributing more to the mortgage or bearing a disproportionate share of the financial burden. Even the little stuff, one owner might feel like they're doing basic upkeep that effects home equity more than the other.


Joint Investment Property Ownership

Joint investment property ownership, such as a vacation home, offers a unique opportunity for shared financial responsibility and the realization of homeownership goals while maximizing savings. By coming together as co-owners, individuals can pool their resources, making the financial commitment more manageable and significantly enhancing their purchasing power.

This collaborative approach not only spreads the financial burden among multiple parties but also opens doors to properties that may have been out of reach individually. With combined resources, co-owners can access a wider range of properties and potentially secure a more desirable vacation home in sought-after locations.

Joint ownership of a vacation home also provides the opportunity for each co-owner to enjoy the property for personal use during designated times or seasons. This arrangement ensures everyone benefits from the investment and has the opportunity to create lasting memories in a shared retreat!

Joint Tenancy While Renting

Considering renting a home with your friends instead of buying? It's certainly an appealing prospect, but before you commit, there are some important factors to consider. We're talking about dividing rent payments, navigating legal agreements, and being ready to handle any unexpected challenges that may arise.

Renting with a friend is a lot more straight forward than trying to buy with a friend. You can effectively leave the maintenance and repairs to the land lord with the basic bills like rent and utilities to be divided.

But you have to think about HOW you're going to divide responsibilities for the bills. For example: is the energy based on use or evenly? Does the extra parking spot get split ownership or does one persons get it but pay more each month? Even the little things like how hot you like your place can lead to bigger arguments later that may negatively affect your relationship with your friend. Below is a brief list of pros and cons to consider:


  1. Shared Expenses: Renting together allows friends to split monthly rent and utility costs, making living more affordable.

  2. Social Dynamics: Living with friends fosters strong relationships and shared experiences. You'll never be lonely!

  3. Pooling Resources: Sharing space reduces individual expenses for furnishings and household items.

  4. Flexibility: Renting provides the flexibility to relocate easily if needed for job opportunities or other changes.

  5. Shared Responsibilities: Dividing tasks like cleaning and maintenance lightens individual burdens. Setting up a cleaning day can make chores fun.


  1. Financial Risks: Co-signing a lease means each person is liable for the entire rent, risking financial strain if one friend can't pay or you get into a huge fight and one of you decides to leave.

  2. Legal Complexities: Clear agreements and understanding lease terms are essential to prevent conflicts.

  3. Conflict Resolution: Disagreements over chores or expenses can strain friendships. When you live together you may fight more.

  4. Unforeseen Changes: Life events may disrupt living arrangements, requiring adjustments.

  5. Unequal Contributions: Differences in finances or lifestyle may cause resentment among roommates. Especially if your living styles are totally different.


Whether you're thinking about sharing a rental, splitting a mortgage, or investing in property, it's essential to weigh the pros and cons, set clear boundaries, and keep communication open. With the right approach, co-ownership can be a rewarding adventure that strengthens both your finances and your friendship.

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