When my friend Natalie Chevarie — a smart, fun-loving lady I met at a party — first invited me to her home, one thing totally surprised me. She was a homeowner. At the time, she was the only one in my group of friends, made up mostly of 20-somethings and people in their early 30s living in Nova Scotia, who didn't rent. And what was Natalie's secret? She co-owned her home with a third party.
"I decided to co-buy my house because as a person with a heavy student debt load, I wanted to buy something that was within my financial means," explains Natalie. "I also wanted to share the maintenance and learning experience of having a ‘first home’ with someone else, someone neutral who I could make ‘business’ decisions with about how to manage our house as an medium-term investment."
Natalie teamed up with a friend of her husband's to co-buy her first home. So far, splitting her house with a third party has worked for her: "We’re like neighbours… with benefits. You know that the person living with you cares about maintaining the household and protecting their/your shared investment."
Natalie's experience is growing increasingly common, as housing prices climb across Canada, especially in cities like Vancouver, where the price for an average detached house has surged to a hefty $2.5 million. According to Vancouver's UDI Affordability Index, fewer than half of Vancouverites can afford to buy their own single, detached homes. In fact, most Canadian millennials can't afford to buy homes on their own, as buying their first home costs them five to 10 times their annual household income.
Canadian realtors have been noticing an increase in co-buying homes with family members (like one's parents) and friends. Some Canadians may even start co-buying with strangers. Noticing a marked interest in co-owning homes, Vancouver realtor Jen Li says she's working on a website to help connect potential co-buyers to one another. "A lot of people just want to find each other, but they don't know each other. It's kind of like dating," she tells CTV News.
Natalie has several tips for anyone considering co-owning a home. She found that having regular meetings about household matters and communicating in a straightforward manner were essential. "The most important quality has been for co-house owners to be flexible and cooperative," she adds. This may mean not buying something you really want, like a new dishwasher, if there are higher-priority items for the group.
Natalie also stresses the importance of signing a straightforward legal document to cover all your bases. Toronto real estate lawyer Mark Weisleder couldn't agree more, encouraging anyone considering co-buying to see a lawyer and draft up some legal docs, even if they're co-owning with people they trust, like family members.
“Just because it’s family, things can go wrong,” Weisleder tells the Financial Post. “If people aren’t happy, unfortunately, the only thing you can do is call lawyers and the only people who get rich in lawsuits is lawyers.”
You may even want to create a household account with those you co-own your home with: "One of the most important things that we did is set up a shared banking and a shared households savings account, so we put in a small amount every two weeks to our shared savings," explains Natalie. "This is an emergency fund or can sometimes be used to pay off lines of credit or any household expenses."
Would Natalie recommend her experience to others? She says that though co-owning your own home can sometimes "seem like more work because of the need to coordinate for any household decision-making," she'd suggest a co-owning arrangement "to people who are willing to communicate regularly and have experience working in teams."
"Overall it’s a good experience and a positive learning experience."
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