At a time when housing affordability is at an all time low, people are reconsidering just who makes a good real estate partner
According to Harry J. Creviston, a personal finance writer, the key to purchasing a home comes down to three things: deciding to buy property, coming up with a plan to save money for a down payment, then following through with said plan. Though he acknowledges that it may take a few years and some minor sacrifices, in the end, it really is this easy. “It is within the reach of most families if they are farsighted enough to look ahead and do some economizing,” he writes. Simple, right? One minor caveat: Creviston has been dead for decades, and he wrote this advice nearly a hundred years ago.
In 2024, the obvious truth is that the home buying landscape looks very different than it did in 1925. The available supply of single-family homes are at near record lows; of those available, only 16% were affordable to local median earners; and two-thirds of Americans say their wages just aren’t keeping up with inflation. The New York Times called it “most unaffordable housing market in generations.” Though counsel similar to Creviston’s is still pointlessly dolled out—skip the avocado toast, buy a home—Americans, particularly younger ones, need a home-buying strategy that is not a century old. And many believe they’ve found it in buying a home with friends.
Buying houses with platonic partners is a growing trend among homeowners
“Buying with people who are not your significant other was the only way I could buy real estate,” says Kristina Modares, a cofounder of Austin-based brokerage, Open House Austin, which specializes in working with first-time home buyers and advocates for “creative” home buying. In 2013, she’d been renting a home with roommates and was interested in purchasing a place, but quickly realized that it wasn’t an affordable option alone. So, she looked for a partner. “I ended up buying my first house with my friend, Brent, and we rented it out as an investment property,” Modares says.
A few years later she met Stephanie Douglass, Open House Austin’s other cofounder. Douglass had been in a similar position and looking to build wealth through real estate, but knew she couldn’t buy a home on her teacher’s salary. “I partnered with my mom on a property,” she says. The two women met on Instagram soon after and bonded over their shared interest in real estate as a wealth-building tool. Since then they’ve bought a number of properties—some between the two of them and others with different groups of friends—using most of them as vacation homes and Airbnb rentals.
They’re far from the only ones who are looking outside of traditional romantic partnerships when purchasing property. According to an upcoming first-time homebuyer report from real estate company Opendoor, about a quarter of first-time home buyers did not purchase their house with a significant other but rather looked to friends (11%), siblings (7%), colleagues (3%), and even people they met online (3%).
“Buying homes with friends is the only way people can afford to buy and get in on the equity appreciation.”
The growing interest in a platonic purchasing strategy spans a number of different scenarios. There are people like Modares and Douglass who mostly buy investment properties, but there are also many who choose to purchase a primary residence to live in with their co-owner like a roommate. (Buying duplexes and triplexes, which offer more privacy among friends, can be popular in this arrangement.) “We realized you can put together deals of all shapes and sizes,” Douglass adds. Additionally, startups like Arrived or Pacaso, which facilitate co-ownership and fractional ownership deals, are further normalizing the growing trend.
“Affordability is at an all time low. If you read the data, it says it’s at the lowest it's been since the ‘80s,” says Chris Naghibi, a lawyer, licensed real estate broker, and chief operating officer of First Foundation Bank. “What’s happening is the majority of the American population is priced out of their ability to buy a home.” He believes it will only become more commonplace for people, particularly younger ones, to pool their resources in order to get their names on a deed. “It’s the only way people can afford to buy and get in on the equity appreciation,” he adds.
The benefits of buying homes with friends
Purchasing with friends offers certain advantages to homebuyers, most notably more time and purchasing power. Whether buying a first-time primary residence or an additional investment property, partnering with others could make it possible to buy sooner than would be possible if one were to save alone or to put more money down. “I can’t speak for other states, but the housing market is really strong in Texas,” Courtney Okanlomo, owner of Collective Realty Co. in Houston, says. “You can’t afford to wait. As houses appreciate in value, you can’t wait until you’re married or have a higher paying job. And if you can’t do it alone, you have to consciously do it with someone else.” Buying sooner also means partners have more time to grow equity in the home, she adds.
This is what she explained to clients Jazmine and Jada Grant, 23-year-old twin sisters who bought a home together in Houston last year that they now use as their primary residence. Originally the twins planned to rent an apartment, but Okanlomo prompted them to consider buying instead. “She was the one that opened our minds to the possibility of us buying and how realistic that was for us,” Jazmine says.
In the Houston market and with various first-time home buyer benefits, Okanlomo says the money that would go towards the first month’s rent and a security deposit could be used for a down payment instead. While the numbers might look different in every city and market, it’s worth considering whether a group of people could pool savings for a down payment and collectively contribute monthly to mortgage payments. “You can throw money out the window every month [on rent], or you can use it and build up equity and take it out when you want,” Okanlomo says.
Purchasing homes with platonic partners requires a fresh perspective
Still, it’s not always easy to convince people to consider buying with platonic partners, Okanlomo says. There is a driving idea that big life decisions should be made with a spouse, and yet marriages are on the decline across the United States and the median age of those who do tie the knot is much older. So why not make a choice that benefits the current you, not an idealized future version that may or may not come to pass? This is what sisters Jamie and Samantha Lindsay, cofounders of jewelry brand Lindsay Station, argued when they bought a home together in 2021. “This is our dream home for this era in our life, and it’s the perfect opportunity for right now,” Jamie says. “I don’t want to wait for a different scenario when this opportunity is [here now] and can really benefit us in the long run.”
It can take some mindset reframing. Douglass and Modares say they frequently get negative feedback from people on the internet who don’t agree with the idea. The perceived lack of permanence can make buying with friends seem risky, yet many argue that this risk isn’t all that different from more traditional arrangements. “People always ask what happens if one of us meets someone and wants to move out or if one of us wants to live alone,” Samantha says. “Those types of things happen to married couples too, and then you have to figure out what to do with your space.”
“This is our dream home for this era in our life, and it’s the perfect opportunity for right now. I don’t want to wait for a different scenario when this opportunity is [here now] and can really benefit us in the long run.”
Some even see the impermanence as a benefit. “It’s not as binding as you sometimes think it is,” Jazmine says. The Grant sisters have talked about future plans for their home, whether it be renting it out, listing it on a platform like Airbnb or Vrbo, or even selling it, and say it’s liberating to realize there are plenty of exit options that could financially benefit both of them. The Lindsay sisters feel similarly. “When it’s time, we would have that conversation and see where the other person’s head is at and do what’s best for both of us,” Samantha says.
Risks of buying homes with friends and how to protect yourself
Buying a home in any circumstance requires serious consideration, and perhaps even more so when buying with a friend. Like any investment, there are risks, though some are unique to a platonic business arrangement. Arguments and lost friendships are common fears, and should this happen, getting out of the deal is not as quick or smooth as ending a rental agreement. Each party’s credit could also take a hit if someone gets behind on payments, so it’s important to know your partner can make their share of the mortgage payments. Additionally, making drastic changes to the home—like renovations—could prove challenging if co-owners have different visions.
“You run the risk of one of you losing your job or needing money and unless you have a clear and defined agreement and structure in place, that can be problematic,” Naghibi says. If one person in a partnership suddenly wants—or needs—to liquidate their investment by selling, that can prove challenging for all involved. Not only does this create timeline issue—the home could be on the market for months—but others need to be willing to sell as well. “In the meantime, the other buyers will have to come up with another way to cover the money because you still need a place to live,” he says. “It can be very difficult.”
Luckily there are steps you can take to protect yourself. “Buying with friends is not an immediate no, but it requires an extreme amount of clear and effective communication so that you can make the right decisions,” Nicole (Nikki) Beauchamp, a licensed associate real estate broker at Sotheby’s International Realty, says. She suggests partners discuss their risk tolerance and clearly outline expectations in writing before a purchase. If it’s going to be rented out, who will communicate with tenants? Will you use a property management firm? How will you address damages and required improvements? What is the exit strategy? Where possible, she suggests each party use their own attorney or work with a neutral third party. “It can be awkward, but it’s better that you have these conversations now because you may end up realizing it’s not the best idea,” she says. “It’s better to figure it out before you buy something together.”
From her experience, Jada agrees. “It’s really important to like have those tough conversations about things like your finances or past credit history. A lot of things can come up in this process, but I was glad to do it with my sister.”
Ultimately, the right choice will vary by situation
As Jazmine says, there are pros and cons to both owning and renting, so it’s worth considering which makes sense on a case by case basis. “I think the risk of a bad relationship that leads to some financial and logistical challenges from a real estate partnership splitting up are well worth the benefit,” Naghibi adds. “As long as that partnership can go [on for] a couple of years and build some equity.”
Those who have bought with platonic partners recommend taking plenty of time to research and understand the gravity of home ownership. “My biggest piece of advice would be: don’t be afraid to ask for help,” Samantha says. “Tell a realtor you’d love to buy a place and ask what that could look like, because we knew absolutely nothing.” Jada shares similar advice: “If somebody is open minded enough to explore that opportunity with you, you should look into it.”
While the decision to buy with friends will vary, many advisors recommend at least considering the option if owning real estate is a goal. “For people in our grandparents’ and parents’ generation, buying a home without a spouse might seem really unorthodox,” Jazmine says. “But we didn’t want to hold ourselves hostage to the idea of what should be.”
This story originally appeared on Architectural Digest US.
