Buying a home is a major financial commitment, and while it’s common for spouses to purchase property together, many people consider co-owning with a friend, family member, or business partner. While this arrangement can be beneficial, it also comes with potential risks.
The Benefits of Co-Owning a Home
✅ Shared Financial Responsibility – Splitting mortgage payments, property taxes, and maintenance costs can make homeownership more affordable.
✅ Increased Buying Power – A combined income and credit profile can help qualify for a larger loan or a better interest rate.
✅ Investment Opportunity – Real estate can be a great way to build wealth, and co-owning allows you to enter the market with lower financial risk.
The Risks & Considerations
⚠️ Legal & Financial Complexity – Disagreements over financial obligations, maintenance, or future plans can complicate ownership.
⚠️ Exit Strategy – If one party wants to sell, refinance, or move, having a clear agreement in place is crucial.
⚠️ Credit Risk – If one party fails to make payments, the other co-owner is still responsible, which can impact credit scores.
How to Protect Your Interests
- Create a Co-Ownership Agreement – Outline financial contributions, responsibilities, and what happens if one party wants to exit.
- Choose the Right Ownership Structure – Options include Joint Tenancy (equal ownership with rights of survivorship) or Tenants in Common (ownership shares can be divided and transferred separately).
- Discuss Long-Term Plans – Make sure all parties are aligned on their expectations for the property.
Final Thoughts
Co-owning a home can be a great option, but it requires careful planning and legal protection. If you’re considering this path, consult with a real estate attorney to ensure your rights and interests are safeguarded.
Thinking about co-owning a home? Let’s discuss your options and make sure you’re set up for success! Reach out to the Davis Schilken, PC team today to schedule a no-obligation meeting with one of our skilled attorneys (303)670-9855.