Rising prices are causing many people to rethink their living arrangements. Some are choosing to buy a house with a family member that they’re not married to, such as a parent or sibling. That can make homeownership more affordable, but it carries a unique set of risks. Before you decide to buy a house with a family member, weigh the pros and cons.
Benefits of Buying a House With a Parent or Sibling
You might not make enough money to buy a house on your own. A member of your family might be in the same boat. If you pool your resources, you might be able to afford a house that’s large enough for both of you.
Sharing a home can also mean sharing housework, maintenance and yardwork. That can minimize the burden on each individual, in terms of both time and cost.
You might decide to share other responsibilities, such as cooking meals. If either of you has young children, the other adult can help with childcare. If you buy a house with a sibling and you both have children, you can watch each other’s kids and share the responsibility of driving them to and from afterschool activities and medical appointments.
Many people only visit relatives from time to time. Living together can give family members an opportunity to forge strong bonds.
Problems You Might Encounter
You and your relative might not be able to contribute equally to a down payment, mortgage payments, homeowners insurance, property taxes and maintenance. To make that kind of situation work, you’ll have to discuss how much each person can afford and how much of a stake each person will own in the house. A real estate attorney can help you draft a legal agreement.
You might think that’s unnecessary, but many relationships have deteriorated because people had different expectations and one party felt that the other wasn’t pulling their weight. Putting things in writing can help you avoid a conflict.
You should also think about how circumstances might change in the future. For example, what will happen if you buy a house with a sibling, then one of you loses your job? What if you buy a house together when both of you are single, then one of you decides to get married? Will that sibling move out, will the new spouse move in or will you sell the house?
Be Realistic and Communicate Clearly
Buying a home with a relative can reinforce existing family dynamics. If you and your parent or sibling already have a strong relationship, owning a house together might bring you even closer. If you have a strained relationship, living together might be a recipe for never-ending conflict.
Explicitly discussing finances, chores and other issues up front can help you avoid a problem. If you have different expectations, you might be able to hash things out, or you might realize that owning a home together wouldn’t work and decide not to move forward.
