Did you know, that 43 per cent of 18-to-24 year olds are contemplating buying a house in the next two years? But there’s a new catch – young buyers are more likely to purchase a home with a family member or friend.
Erica Nielsen, the Vice-President of Home Equity Finance at RBC said “For many millennials, home ownership is a natural part of their journey and we’re seeing the next generation eager to get into the market, even if that means exploring alternate options like buying with family or a friend. Whether purchasing on your own or with a partner, stress-test your mortgage to ensure affordability so you’re prepared, no matter what life throws your way.”
In the next two years, 29 per cent of people are considering buying a home! And why not? If you have the finances, it can be a great investment.
Going in on a home with your friends and family can be tough though. You have to make sure to choose a friend or family member who you can live with, and you have years of experience with. Your drinking buddy from college? Maybe not a smart move.
Here are Nielson’s tips for first time buyers
- Get on the same page:Open the dialogue on your absolute must-haves. There will likely be some different items on each of your lists so work together to come up with one list that you can both agree on.
- Stress-test for affordability:Try out different financial scenarios to see how much you can really afford. Talk about what would happen if one of you lost your job or had a change in financial circumstances, and come up with a plan.
- Get it on paper:Create a simple agreement that outlines your arrangement including what costs each party are responsible for, and don’t forget utilities, maintenance and moving costs. You both might agree on how to handle the home purchase in theory, but life and relationships change, so having a contract in writing is key to solving disputes going forward.
- Have an exit strategy:Include in your agreement how you will deal with the property if one party would like to sell.