Family ties

First home buyers are banding together with friends and family.

 
Many first home buyers are turning to smart strategies to get a toehold in the market – and one growing trend is for first timers to team up with friends and family to purchase a property jointly.
 

Compelling pluses

 
Co-buying certainly offers valuable advantages. By pooling financial resources, buyers enjoy far greater purchasing power. That can mean being able to afford a better quality home or a more desirable location, thereby enhancing the prospect of healthy long term capital gains.
 
With greater combined savings, co-buyers are also better placed to avoid lenders mortgage insurance – a cost that can run into thousands of dollars for buyers with a deposit of less than 20%.
 
And of course, buying with another person means being able to share the burden of ongoing bills for home maintenance, rates and insurance. It can all add up to a more positive, less financially stressful home owning experience.
 
It’s worth noting that these upsides don’t just apply to first home buyers. Investors can benefit from co-buying too.
 

Weigh up the possible downsides

 
Along with the pluses, co-buying can have draw backs. For first home buyers it may mean sacrificing government concessions, and it’s worth crunching the numbers to check that co-buying leaves you better off overall.
 
In addition, every buyer needs to have a clear understanding of how things will work. What happens, for example, if a partner comes on the scene, or one owner wants to sell up?
 
Rather than simply hoping it will all work out, it makes sense for co-buyers to have a formal co-ownership agreement drafted by a solicitor. This will set out in writing how vary possibilities will be handled by everyone.
 
With property values remaining strong, the trend of co-buying looks set to gain momentum. It could be just the solution that allows young buyers to climb the property ladder while bringing families and friends closer together.