Purchasing a Luxury Miami Condo with a Friend
More and more Miami homebuyers are purchasing homes with friends. For some, it is the idea of purchasing a nicer luxury condo and being able to live with their most trusted friend. It is living the dream lifestyle and not having to pay the bill all on your own.
A luxury Miami condo purchase is a large financial commitment and there is a risk to purchasing a home with a friend. But with the right knowledge of homebuying and smart preparations purchasing a home with a roommate can be a successful investment.
Pros and Cons of Purchasing a Miami Condo with a Friend(s)
It increases the budget
Purchasing a home with a friend or two means that everybody is dividing up the housing costs. This means that a home buyer is able to purchase a property that requires a larger monthly payment than what they would afford paying everything on their own. This means that highly desirable properties are now within reach that wouldn't be there when purchasing by yourself.
Qualifying for a mortgage
When there are two incomes on a mortgage application it looks much more favorable as opposed to just one. There is also the added benefit of a lower debt-to-income ratio and all the other benefits of pulling two incomes for one purchase. This often translates into a lower interest rate and then a lower monthly payment requirement.
Saving money on other living expenses
Not only can you save on bearing the brunt of the full price of a home purchase and on what you will be paying in interest but there's also splitting the cost of other living expenses like utilities and maintenance costs. Purchasing with a friend means you will have help in all of these areas because there are two people or more instead of just you.
Drawbacks to purchasing a home with a friend(s)
It can put stress on friendship
Having a huge financial responsibility can be stressful and unless you have a very strong friendship that has gone through other tests of life it might not be the right time to put this stress on your friendship. Homeownership is a huge responsibility and if something happens to impact a friend's ability to pay it puts even more stress on the friendship.
Additionally, you could encounter disagreements over how owning a home should be approached or should be maintained and taken care of.
It could negatively impact your financial status
If something happens where a friend is not able to pay or just does not pay for their portion that portion is still required to be paid. This means you will either need to pay the extra or take the hit to your credit rating for not making a payment on time. A late payment or a missed payment does not only impact one person it impacts everyone on the mortgage agreement.
It is a long-term commitment
If someone wants to walk away from ownership of the property it could be difficult to find a different purchase arrangement. This would mean switching your mortgage to an assumable mortgage with a new partner or refinancing the property. Sometimes these are easier said than done and it could end up in a forced sale of the property if one person wants out.
Tips for Purchasing a Miami Condo with Friends
The best way to approach a purchase with friends is to clearly map out the plan and as great of detail as possible before signing any purchase agreements and mortgage paperwork that have you legally bound and responsible for the property. You want to make sure that you are not just walking into a huge investment commitment with anybody. Make sure that you have a close relationship with these friends and ultimately can see yourself living with these people and seeing them more than anyone else as well as see yourself resolving and working through issues together in a responsible manner.
If you believe you have trustworthy and solid friends to make this important life commitment with you still want to discuss ownership terms with a professional third party and get into writing the terms of ownership for every member who plans to be on the mortgage.
This holds everyone responsible on a legal level for the agreement you all have discussed. There is no going back on your word when there is legal documentation and a third-party witness to the agreement. Make sure every bit of the ownership details are documented in writing not to accuse anyone of not holding up the agreement but to protect everyone. The best third party is a real estate attorney. The right co-buying friends will have no problem putting everything in writing and legalizing it.
Find a Condo that Fits Your Specific Needs
When you purchase a home with friends you want to make sure that each of you has your own private space and that the shared areas work for all of you on a daily basis. For example, you may find that purchasing a property where each room has its own private designated bathroom is the best for you and your friend's personal preferences.
You may find that sharing the kitchen is totally within your comfort zone but if you are going to purchase a home you really would like to have the luxury of your own bathroom. Make sure that the property you purchase has plenty of personal space for each person and plenty of room in the shared spaces so that everyone is comfortable in their daily living situation. Unlike renting where you are probably more open to making things work you are now paying into more responsibility and want to have a home that you do not regret paying for.
Work with an Experienced Agent
When you do go shopping for luxury Miami condos make sure that you have the help of an experienced local agent. They can ask questions about what you and your friends are looking for and even help you to consider some things that you may not have thought about that would be in line with your daily living style. They can help you find the best property that works for you and your friends and will be within an actual affordable budget and in an area that has all the neighborhood amenities that you are dreaming of.
If you are searching for a luxury Miami condo contact me. I am here to help you find the perfect Miami condo property whether you are purchasing on your own or with a group of your favorite people. Contact me anytime for any Miami real estate needs.