Co-ownership is becoming trendy.

It is becoming difficult for first-time buyers to own a home, especially when paying high rent. Many families are living on the edge with the high cost of living, so families are buying homes together. On average, a three-bedroom apartment today cost $3,000 monthly to rent. Two tenants can come together and buy a home instead of paying rent, and that will make them co-owners. Co-ownership can be rewarding but be cautious since it is a significant undertaking when sharing a home and a mortgage.

There are many advantages of co-ownership. Families can buy a home because they can qualify easier for a mortgage. They can negotiate a lower interest rate because of their combined financial strength. Another advantage is that the co-owners can put a more significant downpayment on the purchase. They can share costs such as repairs, maintenance, improvements, and utilities. Later, the families can use some of the equity to buy another home and reconcile with each other.

There are a few things that we can improve with co-ownership. If one of the co-owners has large debts, poor credit, or a low-paying job, it can affect qualifying for a mortgage. Another problem is that the other owners must carry the shortfall if one party cannot keep up with their share of the financial responsibilities. The next snag is the arrangement to share the home and the duties such as snow removal, grass cutting, and any other maintenance the home may need.

Co-ownership works when all partners carry their weight. Co-ownership is popular among communities where a family will buy a home together. In most cases, siblings will take on an extra job and use the income to pay down their mortgage. At that point, they will buy a second home, and this trend will continue until all the family members own their own home. Co-ownership works best when two partners buy a house together since, with more partners, there is potential for more problems. Each partner should contribute financially towards the downpayment and closing costs. Before buying, the partners should discuss how they will share the accommodation and the cost.

Co-ownership is like a marriage with a prenuptial agreement. The parties must have an exit strategy before buying a home with a partner. What happens if one partner dies? The partners can choose to take title to the property as joint tenants or tenants in common. As joint tenants, if one partner dies, the entire property belongs to the other partner. Joint tenancy is popular among married couples or when a partner wants to give the partner's portion to the other. Most co-ownership arrangements are made as tenants in common where upon death, their portion of the property's value goes to their estate and not the surviving partner. Unlike joint tenancy, where all the partners have equal ownership, the tenant in common gives a certain percentage of homeownership according to how much each partner invests in the property.

Use a real estate lawyer to draft a co-ownership agreement. Co-owners can have a cohabitant agreement and an independent property agreement. The cohabitant agreement addresses how they will share the property. It describes in detail how the occupant will use the home. When drafting a co-ownership agreement, consider it a rental property where, for example, one may live in the basement while the other is on the upper floor and divides the rental and utility cost accordingly. The co-occupant can open a joint account and pay their share of the monthly instalment. You can use the money from the joint account to pay for the mortgage and other expenses. It is smart to keep three months of reserve cash in the joint account. The property agreement can address the choice of taking the title, the distribution of shares, and what to do if one owner wants to end the deal. In addition, a property agreement must address what to do if one party cannot live up to their financial responsibility and how to handle any disagreement.

 A great relationship is the hallmark of a flourishing co-ownership. When the connection is strong, parties do not look upon each other to get the job done. Choose a partner with equal strengths and someone you can trust. If any partners are married, it's essential to know whether the relationship with their spouse is solid or rocky. If it is rocky, it can affect your partner and ultimately you. Disagreements will happen, but how we resolve the problem is ingenious.

The benefits of co-ownership outweigh the risks. If you add up the amount of rent money you can save, the equity you can build, and the amount of money you can save with shared expenses, co-ownership is a smart choice.