Buying property can be a significant milestone for many people but may remain out of reach because of high real estate prices, especially in New York. Some options can have flexible terms made for aspiring property owners. They might also consider sharing the financial burden with people they trust, such as family members and friends.
Collaborating with a friend may sound ideal, but this setup can become complicated. Before choosing this option, it can be wise to consider the following:
- Financial status and information – When purchasing property with a friend, both of you will be liable for the mortgage. Your credit scores or ratings can also impact each other’s finances.
- Ability to commit – Financial obligations concerning a property is a long-term commitment and responsibility. This means you and your friend may need to put in effort when facing conflicts or disputes for the sake of your investments.
- Tax arrangements – It is vital to determine how to accomplish tax requirements. Only married couples or relatives can share deductions, so you and your friend may need to manage these issues separately.
- Risky scenarios and how to approach them – Survivorship laws and other policies may apply for co-owners who are not related or married. Before buying property with a friend, check on what can happen to your investment after unexpected developments, including death and incapacity.
Other factors can be relevant, depending on your circumstances.
Making adequate preparations
Co-owning with a friend can be beneficial, but this arrangement can lead to challenges without proper planning and preparation. If this is an option you want to explore, it is best to seek legal counsel. Doing so can help you place legal safeguards and conditions to address disputes that may arise between you and your friend.