What You Need to Know About Buying a House with a Friend

Buying a house with a friend sounds fun, but there’s a serious side you’ll want to consider.

Buying a house with a friend (a.k.a. “co-buying” with your BFF) is becoming more and more popular among Millennials, the generation born roughly between 1981 and 1996. There are many reasons why people love to analyze Millennials, but for us, it’s that they’ve continued to make up the largest number of homebuyers in the market at 37%. This makes Millennials the generation to watch.

Which brings us back to co-buying. Why are they doing it? For starters, Millennials are buying a house with a friend as a way to overcome economic hurdles. On average, they owe quite a chunk of change—nearly $90,000 in overall debt (as of 2020). And if they’re trying to avoid becoming boomerang kids, working to pay off debt and afford living expenses results in very little money in their savings accounts. Not to mention the housing market has been a very competitive sellers’ market, making homes more expensive and bidding wars inevitable.

But, they’re also co-buying with their best buds for reasons rooted in trends. Remote work is a trend that’s been growing exponentially, even before the pandemic. Millennials are also shameless purveyors of the sharing economy, which allows them to enjoy access without ownership. Lastly, Millennials are known for putting off marriage and starting a family, but given all the economic hurdles we’ve listed, this trend is a conundrum of the chicken-or-the-egg sort.

So, we’ve covered some of the reasons why Millennials might be buying a house with a friend. Now let’s look at the pros and cons as well as some practical advice.

Pros to Buying a House with a Friend

1. Buying a house with a friend cuts the price of the home in half (or more, depending on how many friends go in). This means you can buy a house with less money saved up, which is perfect for Millennials.

2. Similarly, co-buying expands your opportunity since it gives you more buying power. With the added buying power of another homeowner, you’d have more homes available to you.

3. When you buy a house with a friend, you’re both able to start building equity sooner. This allows you to stake your claim in an appreciating real estate market earlier than you would’ve been able to alone.

4. It’s an investment you both can benefit from. When you’re ready to move on, you can rent it out for passive income while sharing landlord responsibilities.

5. And for the Millennials that buy a house with a friend instead of solo renting a studio apartment, it fulfills the desire for communal living while also reaping the benefits listed above.

Considerations When Buying a House with a Friend

Ah, yes. Buying a house with your bestie for the restie. Sounds like a forever sleepover and we’re here for it! Except, it’s a pretty weighty decision that comes with some serious considerations to ponder.

1. When you’re buying a house, you need to be completely open about your finances. This includes your credit scores and/or credit reports, how much cash you have available for a down payment, and what you’re able to spend on a monthly budget. We know you’re open with your friends, but are you prepared to be this open?

2. Do you know how you’ll share the property? If one of you contributes more to the down payment or the monthly payment, or lives in the owner’s suite, how are you going to split the ownership financially? This also impacts your finances when tax time comes and when you go to sell the property as you’ll have to decide who gets what share of the equity.

3. Get it all in writing. It’s more than just the mortgage: there are all kinds of expenses associated with homeownership. This includes taxes and insurance, maintenance and repairs, upgrades and remodeling, and HOA fees (if applicable), just to name a few. You and your friend(s) should sit down and write how you’ll share these costs as well as the process you’ll follow to make these decisions. Hey, no one said doing business with friends was all fun all the time.

4. What happens when things change? Not if; when. Because even though it feels like the way things are is how they’ll be forever, inevitably one or both of you will find a partner, change jobs, or be impacted by some other major life event. Or worse, there might be a falling out and one of you might want to move out. In any event, it’s smart to have a written plan for the future and make sure it covers legal and financial obligations for different scenarios.

We know you’re open with your friends, but are you prepared to be this open?


Millennials consider co-buying for many different, valid reasons. It can be difficult to plan for the next big steps in life when you haven’t even tackled homeownership. Thus, buying a house with your BF4L might make homeownership attainable when it otherwise wouldn’t be. However, it’s important to consider the possible risks, talk them over with your co-buying buddy, and craft a written agreement to make sure you have a plan for the future.

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