A Friend, A Home, A Mortgage

Thursday, May 25, 2017 Written by 
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By Glenda Brass, MBA


There comes a time over the course of any renter's time in a particular piece of real estate where it seems that the payments are providing a great stream of income for a landlord but little for you. Indeed, as incomes begin to creep up and the ability to handle at least a portion of a mortgage becomes a possibility, more and more renters are beginning to feel that way and enlist a friend to make their home ownership dreams happen.


There is a time in life where particular income levels can outgrow renting but perhaps be too small to take on a full mortgage. As a way to either bridge that gap or land a home above a single person's income level, teaming up in with a friend or family member to operate as co-owners on a home is a really good strategy. Many cultures successfully employ this tactic. As with any real estate transaction, these deals require a bit of care and, more importantly, asking some tough questions of yourself and your prospective co-owner.


Why Do You Think Co-Ownership Is For You?


Everyone that ponders co-ownership needs to be sure about why it seems like a good idea. Problems can arise when you and your friend are not on the same page about the benefits you hope to see through co-ownership and that discord can harm the search for an actual home. Are you looking for tax benefits on the new property? Are you looking to upgrade your surroundings by sharing the mortgage burden? Are you hoping to build equity and sell the home in five years? These types of motivations are common and the only way to be sure that you and your prospective co-owner are on the same page is to go ahead and ask them. It may seem silly, but this step has to come before ever going to a showing or looking at an open house as your target will change based on what you are trying to accomplish.


What Happens If You Get That Dream Job Offer?


Any plan needs contingencies and getting involved with a co-owner is no different. What happens if you get the job offer of a lifetime in a different state? Discussion needs to take place about the possible options that face both of you if one of you decides to leave town. There are a number of options available should that occur.


How Much Do I Trust You?


While it may seem crass to ask this in regards to how you feel about your prospective housemate, the fact of the matter remains that a significant portion of your financial future is tied up with this person. If you have doubts about whether your friend has the ability to make regular payments, that should send up a red flag and end the discussion there.


Co-ownership can be a great way to solve the problem of wasting money on rent and wanting to build equity without the income level to do so. However, before ever traveling down that path, you need to evaluate your prospective housemate to make sure that you aren't getting in over your head. Stay careful and you will ultimately find the right living situation for you.


Glenda Brass is a successful real estate consultant who has been in the real estate industry for almost 20 years. She is CEO/Managing Partner of Brass & Brass Enterprises, LLC, located at 2639 W. Manchester Blvd., Inglewood. For a free consultation on anything real estate… selling, buying, renovating, leasing, or to learn about our consumer education offerings through Operation Purchase a Home, contact Glenda at 310-345-9707 or This email address is being protected from spambots. You need JavaScript enabled to view it. .


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