House Hacking: Buy with Friends

Buying a home by yourself may seem impossible in today's growing costs for eveything, including housing. Could there be a better solution than hoping you'll be able to afford a home by the time you're 40? Check out this idea: buy a home with your friends, instead of renting.

Here are 5 reasons why you should look at buying a home with your friends:

1. Paying your rent each month is paying someone else’s mortgage. You don’t get any return on your money besides a roof over your head. If you pay into your own mortgage though, you are putting money into a tangible thing that you can then creat future equity with and take out as the home appreciates over time.

2. If your friend is already your roommate and you're getting along just fine, you should think about buying a house with them! If you are able to share expenses, it will be easier than ever to take the step together. If you pay 1,200$ a month on rent, that is 14,400$ a year paid to your landlord. If you and a friend or more friends combine your savings together and make a savings plan, you may be closer than you think to owning a home.

3. Downpayments. Did you know that the downpayment on a home only has to be around 5% of the purchase price? For a $200,000 home, that’s just $10,000. A $300,000 home requires $15,000, and a $400,000 home needs a $20,000 down payment. These numbers might seem daunting alone, but when you split them with friends, they become much more attainable. If you and friends can lock into a certain property for an agreed upon number of years, that is a great way to come out of your first home with equity for each. As the rates are expected to decrease, a monthly mortgage payment may even be less than you are currently paying for rent.

4. Want a pet, or, to find a home that allows your current animal? Worry no more about what your landlord will allow. You might have to make sure your friends aren't allergic though. With you and your friends new home, you can bring lady purrrsia or fido. Bonus? Maybe you'll have a catsitter in the future if you want to go on vacation.

5. Personalize. Owning a home means that you can paint it however you want (for the most part), hang pictures, mirrors and whatever you want, wherever you want (also for the most part). Finally settle and get the feeling of a home away from your home instead of just staying in a place you know is temporary.