Seven years ago, Phil Levin and his girlfriend, Kristen Berman, pondered a common question: Should we move in together?
Levin assumed they’d take a predictable path and find a more affordable apartment outside of pricey San Francisco. But Berman, a behavioral scientist, shared her reservations about leaving their friend network — and some facts to back it up.
“All the behavioral science research shows that’s one of the worst things you can do for your happiness, ” Levin says.
Instead, the particular couple rented a Victorian-era mansion in San Francisco’s Hayes Valley neighborhood plus invited nine friends to move within. Today, they co-own the multiunit property in Oakland, California, called Radish, which houses 17 adults and two infants.
It took some effort to find the right property plus figure out finances. But the now-married couple couldn’t imagine designing their life — or raising their own daughter — any other way.
“Being able to have this extended family of ‘aunties’ and ‘uncles’ close by has been wonderful, ” Levin states.
Many co-buyers operate on a smaller scale. But no matter the size of your own group, co-buying requires extra planning plus paperwork. If you’re willing in order to get vulnerable about your finances and long-term goals, the payoff of companionship can be worth it.
KEEP AN OPEN MIND
In the National Association of Realtors’ 2022 Profile of Home Buyers plus Sellers, the record-high 5% of first-time home buyers were “other household compositions” — that is, something different than single, married or even coupled.
“It can be a great situation, and a way to enter the market that these people wouldn’t become able to enter otherwise, ” says Don Koonce, a real estate agent in Seattle who has helped dozens of co-buyers during his eight years within real estate.
Many co-buyers Koonce has worked with are platonic friends that have already been living with each other for years. Yet they’re as diverse because the types of homes they will buy, which range from traditional single-family homes in order to condos plus duplexes.
The right home depends on your group’s size and tolerance of personal versus shared space. Houses with basements work well for separate living spaces, Koonce states, or you could remodel.
Recently, Koonce assisted a mother and daughter buy a split-level that they renovated into two distinct units, including individual kitchens.
“It was beautiful, ” he says. “I don’t see any problem with a resale on that, because somebody could rent it out. ”
STRESS-TEST YOUR RELATIONSHIP
Even for family members or experienced roommates, the financial commitment associated with co-buying raises the stakes.
Ashley Agnew is an investment advisor and monetary therapist along with Centerpoint Advisors, a wealth management firm in Needham, Massachusetts. When working with co-buyers, she role-plays worst-case scenarios to “stress test” the relationship, such as how they’d handle major home repairs or theft.
“You really do have to get a little bit financially naked with the particular person that you’re buying with, ” she says. “There has to be a lot of transparency. ”
Agnew always recommends that will co-buyers seek legal counsel. An estate attorney can draft a cohabitation agreement — something that’s not just for romantic partners, she notes. That way, all parties know what to expect if someone wants out of the homeownership commitment.
“It’s almost like running the minibusiness, especially if it’s not a coupleship, ” Agnew says.
A good estate lawyer can also help co-buyers understand options for titling the home, like joint tenancy or even tenancy within common. Each arrangement has pros, cons and legal obligations.
FIND THE RIGHT RESOURCES
To move your plans from dream to reality, it’s essential in order to find a lender which is familiar with — and supportive of — co-buyers’ unique needs. That’s often the first hurdle, Koonce noted. Some realtors hesitate to work along with co-buyers, too.
“It’s a lot more paperwork, ” he says, “and a lot more coordinating and getting people to agree. ”
To provide better service, Koonce earned a professional certification established by Seattle-based real-estate startup CoBuy. The company offers education with regard to real estate agents, attorneys and lenders, as nicely as services for co-buyers themselves.
After establishing Radish, Levin found his inbox flooded with questions regarding co-buying plus co-living. The interest exposed an information gap: People craved trusted guidance on how to do this successfully.
So in 2020, Levin teamed up along with close friend Gillian Morris in order to co-found the particular Substack newsletter Supernuclear . It provides advice, templates and tools to navigate common challenges associated with co-buying plus co-living.
“We didn’t invent this concept, ” Levin says. “We’re sort of standing on the shoulders of other individuals, so there’s kind of the pay-it-forward element where all of us wanted to have other people experience the happiness and meaning that we’ve gotten through this. ”
This article was provided to The Associated Press by the personal finance website NerdWallet. Abby Badach Doyle is a writer at NerdWallet. Email: [email protected] com .