More People are Buying Homes With Friends and Extended Family, to Better Afford Homes

By Rachel Puryear

People living in apartment rentals have always commonly lived with roommates, as a means of helping better afford their rent. Most people think of buying a home, though, in terms of something normally done by a family who will live there with their partner and kids.

In recent years, however, a new trend is emerging – more buyers who cannot afford to buy a home on their own, are buying homes together with friends and extended families. Together, these households create communal living arrangements, rather than just nuclear (more or less) families.

Several housemates sitting around a table, chopping up vegetables.

What Are Some Features to Look For In a Home for Communal Living?

Having worked with buyers in shopping for homes friendly to a communal living arrangement, I have noticed common features that such buyers often want in homes. Some of these are not common, so a seller with such features might want to emphasize them for possible buyers looking to make a communal home. These features include:

  • Larger home space. More square footage inside the home, as well as outside. This includes more parking space for more cars!
  • Multiple master suites. Some sellers might be tempted to convert a second master suite into two smaller bedrooms – but a buyer desiring a communal home could see multiple master suites as a great reason to buy that home!
  • More bedrooms and bathrooms, including half baths for extra toilets. Having more bathrooms means less waiting, when a house is full of people.
  • Larger kitchens, with room for more fridge space (an extra fridge does not necessarily have to go in the kitchen, though, some people would put it in a garage).
  • Lots of parking – in a garage, driveway, or at least plenty of street parking available.
  • Bathrooms with stall showers, as well as a tub if they have/will have kids. Adults, though, usually prefer stall showers; and many people with mobility considerations require them. Bathrooms with a separate toilet area, or split bath styles, are also advantageous when more people are sharing bathrooms.
  • More closet space, everywhere.
  • Small multi-family buildings – particularly with two to four units, or with more than one house on the same lot – can be great for this purpose. Such buildings are often much less expensive to buy than the cost of multiple separate houses would be. They offer separate living spaces, so that co-owners have more privacy than they might have sharing a house. If a property has extra units, the co-buyers could rent the extra ones, or use one as a shared home office if they work from home.

What Are Some Things People Should Discuss Before Buying a Home Together?

Co-owning a home with friends and extended families can be a great way to make home ownership more accessible for everyone involved, and get more home value for the money. However, with any shared responsibilities; it is important to make sure everyone is on the same page before signing the papers, and to understand what everyone’s rights and obligations are before proceeding.

Of course, roommates should also discuss many of these same things before renting an apartment together. However, with homeownership comes some additional considerations.

Things that potential co-homeowners should discuss in advance include:

  • Who will live in the home, who will occupy what space, how utilities and other joined expenses will be shared, how chores will be divided, house rules, communication, and so forth. These are the same things people would normally discuss in advance with roommates in a rental situation.
  • With homeownership, however; housemates will be responsible for maintenance and repairs to the home, rather than calling a landlord when something needs fixing. Maintenance and repairs cost money, and co-owners will need to put a certain amount of money away each month to save for these. Housemates will need to work out how much each person contributes and when, and how to manage the savings account – and do so in advance. The time to have this discussion is not when an expensive repair comes due, like needing a new roof.
  • Property taxes, insurance, HOA dues (where applicable), and possible other regular expenses must be paid, and are the responsibility of all homeowners. Housemates must determine a system for how these expenses get timely paid.
  • Co-owners must determine in advance how they will hold title to their property. There are several ways to hold title, and these may vary between different states. However, there are two main types of title vesting, which carry very different implications for each owner and their families. These include, generally:
    • Joint Tenancy ownership: Where co-owners own a property as joint tenants, each owner has an equal and undivided interest in the property. Where any co-owner (joint tenant) dies, the remaining co-owner(s) on the deed automatically take an equal and undivided ownership. This is true even where a deceased co-owner left a will stating otherwise. This type of title vesting is common for couples, and is popular in part because it transfers ownership upon death without a probate proceeding.
    • Tenants in Common ownership: Where co-owners own a property as tenants in common; each owner may have an equal interest, or different owners might have unequal interests in the property. Each co-owner (tenant in common) may sell their interest to someone else, or may leave their share of the property to someone else in their will. Tenancy in common is the default form of title, where joint tenancy is not clearly specified. Tenancy in common might appeal more to friends or extended relatives co-owning a house.
    • For example: Jane, Matt, and Mary all co-own a house as joint tenants. Jane then dies, and leaves her share of the house to Brian in her will. Brian is not on the deed. Accordingly, Matt and Mary now co-own the house as joint tenants, with an equal interest. Brian is out of luck.
    • For another example: Jane, Matt, and Mary all co-own a house as tenants in common. Jane and Matt each own a 40% interest, and Mary owns a 20% interest. Jane then dies, leaving her share of the house to Brian in her will. Brian now owns a 40% interest in the house, with Matt and Mary’s interests each remaining the same.
  • Co-owners should also consider the likelihood that one of them might want to move or sell the property within the next several years. Life is unpredictable, and sometimes the unexpected can change plans. Selling a house with multiple co-owners, where one person wants to sell and the others want to keep the house; can get complicated. This situation could force other co-owners to buy out the one who is selling, or find another person to buy in and have everyone agree on that; or force co-owners to sell the house if neither of those options are feasible. Therefore, this possibility should just be kept in mind.

Discussing these questions in advance can set a great precedent of open and thoughtful communication between housemates and co-owners from the very beginning. This can help everyone have a happy, healthy, successful co-ownership and make the most out of communal living, and for many years to come.

Thank you, dear readers, for reading, following, and sharing. Here’s to successful and happy home co-ownerships, and communal living that brings each member more than they would have had on their own.

If there is something you would like to see addressed on this blog, please reach out to me here to ask. If you want to see more content like this and you don’t already subscribe, click here to get the Free Range Life and Work newsletter 2x a month!


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