If it ain’t broke, why fix it? Getting along with the people you live with is super important, so if you find that special someone (or group of people) is there any reason you shouldn’t bring them into that next phase in your life? Home ownership.
They could even speed things along…
Melbourne’s Ben Johnston and his friend Jennifer, both 37, embody the millennial ethos of doing things differently and somehow making it work. Housemates first, the pair purchased a property together in 2008 and have never looked back.
After living together for seven years, the lifelong friends purchased a two-bedroom, one-bathroom unit in Gardenvale for about $425,000.
Lifelong friends Ben and Jennifer purchased in Gardenvale, where this beaut property has just been listed. Picture: realestate.com.au/buy
Ben, a licensed surveyor and Jennifer, who works in finance and insurance, didn’t plan to buy together, but life happened.
“We had been renting the property for about 18 months when it went on the market,” Ben explains.
“We lived through one inspection before we thought ‘Hey! We could buy this and not have to live through any more opens’.
“I think we had both been thinking about getting into the real estate market, but had not spoken about it until that first open house,” Ben, who now owns three properties, says.
The pair decided to forego any more inspections and buy together. Picture: Kate Hunter
An open agreement
It turned out, buying together was a no-brainer, making it more affordable and achievable for them both.
“Whilst we both had sufficient money for a deposit – the 5% that was required at the time – it was the pooling of resources that allowed us to put down a 20% deposit and avoid paying mortgage insurance.”
Ben and Jennifer got a mortgage as tenants in common. “We had a verbal agreement that should one of us want out, then the other would have first chance to buy the other out.
“We both felt comfortable with this verbal agreement, as we had known each other since we were toddlers,” Ben says.
When Ben chose to move out to live with his then-girlfriend and now-wife, Jennifer had first option.
Making sure all parties are happy with the exit strategy is key. Picture: Getty
A ‘foot in the door’ strategy
“She made the call to purchase my half out. To facilitate this, we both sourced our own valuations from qualified valuers. We then simply averaged out the value and that determined the buy-out figure,” Ben explains.
Ben says buying property with his friend helped set him up for future property ownership.
“It helped me establish good saving habits by having a mortgage. It made me realise that a mortgage is not such a ‘big, bad ugly’ thing and it also gave me some realised capital growth when I sold,” he says.
While recommending the approach to others, Ben advises those thinking about it to get independent professional advice and a clear written agreement.
“I would recommend that a legal agreement be drawn up, so there is no confusion as to the terms,” he says. Also consider shared budgeting for rates, insurance and utilities, Ben says.
WATCH: You might not be able to buy a place with your housemate, but they could still help you save…
Information in this material is general and does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. You should also obtain independent professional advice relevant to your financial circumstances.
This article was originally published on
7 May 2018 at 2:58pm
but has been regularly updated to keep the information current.