If you want to tie yourself up to someone despite a changing will, there is nothing quite like kids or real estate.
While countless financial advisers will warn against investing in the latter with a friend or even a romantic partner you're not absolutely sure about, the practice is on the rise due to both lower marriage rates and the temptation of growing equity that one may not have been able to get in on earning solo amid rising home prices.
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One report conducted by real estate analytics firm Attom Data Solutions found that the number of people buying real estate with someone other than their life partner has risen by more than 770% between 2010 and 2021.
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This Real Estate Agent Wanted a Beach House (and Went All In With a Friend)
Common warnings include future conflicts about how to split payments and time in the property as well as the credit damage that can occur if one side won't or can't make the mortgage payments.
But when Realtor.com writer Sally Jones had a friend show her a small beach hut in the North Fork region of New York's Long Island, it immediately felt right to go in on the purchase together. She and her friend Mary had known each other since their school days and would already vacation in the area together every summer.
"What ensued was like a scene in a Federico Fellini film: Mary called the agent to communicate our offer," Jones wrote. "We then saw her hang up and dial the sellers. Words were exchanged. The seller hung up — and Mary's phone rang seconds later."
While this was in 2007 and a lot about real estate has became less affordable since, Jones recently recalled feeling that the purchase would allow them to fulfill a longtime dream without singlehandedly weathering all the related expenses.
They nailed down a 30-year fixed mortgage rate with 6.75% interest and took on a renovation project that would see them replace the roof, remodel the kitchen and add windows to the porch while splitting both the expected and unexpected expenses 50-50 throughout the years that followed.
Be Sure To 'Hammer Out Everything In Advance'
"If you have someone in mind you’d like to buy a property with, draw up a document of expectations before making an offer," she wrote. "Hammering out everything in advance will make decisions easier down the road."
The beach cottage is now worth several hundred thousand more and, according to Jones, the reason that the plan worked out was because the two friends wanted to have a place where they could vacation together as friends (rather than picking weekends like a time-share) and had similar financial values.
"We both like to pay bills on time, and being mortgage-free is a dream we share," Jones wrote. "[...] While switching to a shorter loan made monthly payments higher, the move ultimately saved us tens of thousands over the life of the loan. Two people paying the mortgage means you can go for a higher monthly loan payment."
She and Mary are currently planning a neighborhood party to celebrate both the 100-year anniversary of the cottage they bought and the last of their mortgage payments coming up later in 2023.
