With two months remaining in 2025 and a new tax bill recently passed with provisions that will affect charitable giving strategies, now is a great
Home Sweet Home—or a House of Cards?
Published Date : October 30, 2025
We currently live in a world where home prices are elevated, mortgage rates are high, and millennial household formation is in full force. As a result, some potential home buyers are looking for non-traditional ways to make a home purchase affordable, such as co-investing with a good friend. Doing so has many positives, most significantly that sharing in the downpayment expense could mean you can jointly afford a larger or pricier property—or even multiple properties for investment purposes. According to a recent WSJ article, in 2023, there were 908,000 property purchases where the co-buyers had different last names. This non-traditional ownership structure has continued on an upward trend since 2014, when the number was only 263,000. While some of these transactions can surely be attributed to married couples or other family members with differing last names, the inference is that there were quite a few purchases by non-related parties. But what happens if after a few years, one or multiple co-owners want out? Here are some considerations before entering into a co-ownership arrangement with a friend:
Is there an agreed-upon exit strategy? An exit strategy does not have to specify the number of years of intended ownership, but having milestones spelled out in advance could help ease difficult conversations in the future. For example, all parties can agree that if anyone needs to move out or sell due to specific trigger events, such as moving for a new job or getting married, there could be an agreed-upon process for how to sell the property or allow one party to buy out the other, along with a methodology for arriving at a fair price.
How will maintenance and improvement costs be allocated between owners? The assumption is that costs will be allocated, but it is best to get that in writing to protect your interests. Additionally, who will handle the administrative burden of managing vendors and what happens if the owners don’t agree upon specific improvements to the property?
What title will be used for the property? Typical options for holding title include Tenants in Common, Joint Tenancy, or LLC. Each of these have different implications for what happens to the ownership table if one party were to die and/or if beneficiaries are named outside of the ownership group. What if one of the owners were to become incapacitated? Who could legally step in and act on their behalf as it relates to the property? All catastrophic scenarios should be considered when deciding upon the ownership structure.
Is there an agreed-upon process in the event one party cannot pay their portion of mortgage payments? It is generally best practice to have all owners on the mortgage so they are all legally obligated to pay back the loan. If one owner falls on hard times and cannot meet their mortgage obligation, will the property be sold? Will the other owner(s) accept making the additional payment with no guaranteed recourse for reimbursement?
Beyond these basic considerations, there are additional questions related to how the property will be utilized. If buying a home jointly allows unrelated friends to become homeowners for their primary home, it should be acknowledged that living in close quarters with each other could lead to uncomfortable situations between friends. This would be further heightened as their individual lives progress and perhaps one or multiple parties get married and/or start a family. In this situation, having an agreed-upon exit strategy is essential.
In this post-pandemic era, home affordability feels nearly impossible for many young would-be buyers with seemingly no relief in sight. To realize the dream of home ownership, creative approaches are becoming more commonplace. As exciting as taking that leap might seem, it is important to consult your professional team of advisors when considering a joint property purchase. At a minimum, working with a real estate attorney who is experienced in these types of purchases would be beneficial to ensuring your interests are protected.
Source: WSJ
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