In a hot real estate market, some young adults in Texas and across the United States are looking at creative ways to become property owners. “Co-buying,” where people pool money together with friends to purchase a shared home or investment property, is increasing in popularity as a result. This can have some pitfalls, as with any transaction and contract might. However, if the legal implications are carefully considered and the contracts are properly put together, it can be an interesting way for people to enter the market despite rising prices.
Is co-buying becoming more popular?
Co-buying is absolutely on the rise in the United States. According to The Wall Street Journal, the number of co-buyers of real estate between 2014-2021 increase 771% between 2014 to 2021. A co-buyer based on WSJ data included anyone buying a home with different surnames, so some married couples who did not take another’s name would also be included in this increase. Nevertheless, it indicates a strong trend.
Why is co-buying increasing in popularity?
Simply put, more people are co-buying because real estate costs are becoming higher than many single buyers can afford. In 2020, under 40% of adults under age 35 were homeowners in the United States, compared to 80% of people over 65. While many people don’t look at their co-purchased property as a long-term home, it can help individuals get into the market and build equity so they can move closer to their dream property sooner.
Managing the legal implications of co-buying property
Any real estate transaction comes with legal considerations. In the case of co-buying property, there are even more agreements, contracts, and possible complications to keep in mind. It is therefore pertinent for any buyer, especially those entering a co-buying relationship, to seek legal counsel at every step of the buying process.
