Buying Property with Friends: How to Do It Right
Co-Ownership Can Help You Enter the Market—But Plan Carefully
With property prices continuing to rise across Australia, buying a home with friends is becoming an increasingly popular way to get a foot in the door. Co-ownership can make homeownership more achievable, but it’s not without its challenges. Careful planning is essential to avoid financial and legal headaches later.
Why Consider Buying Property with Friends?
- Enter the property market sooner
- Share ongoing costs like mortgage repayments and maintenance
- Build equity together rather than paying rent
But before you sign on the dotted line, you need a clear plan.
Step 1: Establish a Strong Co-Ownership Agreement
Define Your Goals and Expectations
Before purchasing, sit down and discuss:
- Purpose of purchase – Is this an investment or a long-term home?
- Financial contributions – Who pays what upfront and ongoing?
- Responsibilities – Mortgage, maintenance, insurance
- Exit strategy – What happens if someone wants to sell?
Pro Tip: Put everything in writing. A legally binding co-ownership agreement protects everyone’s interests.
Step 2: Understand Ownership Structures
Joint Tenancy vs. Tenants in Common
In Australia, there are two main ownership models:
- Joint Tenancy – Equal ownership shares; if one owner passes away, their share automatically transfers to the others.
- Tenants in Common – Owners hold specific shares, which can be passed on through a will.
For friends buying together, tenants in common is usually best because it allows different ownership percentages.
Example Ownership Split
- Buyer A: $500,000 (50%)
- Buyer B: $250,000 (25%)
- Buyer C: $250,000 (25%)
Even with different shares, all owners have full legal access to the property.
Step 3: Address Key Issues in Your Agreement
Maintenance Costs & Insurance
Decide how repairs, maintenance, and insurance will be shared.
Selling Ownership Shares
If one person wants to sell, will others have the right of first refusal?
Rental Arrangements
If renting out the property:
- How will rent be divided?
- Who chooses tenants?
Moving Out
If an owner moves out but keeps their share, clarify access rights and rent obligations.
Estate Planning
Each co-owner should have an updated will specifying who inherits their share.
Step 4: Get Expert Guidance Before You Buy
Buying property with friends can be a smart move—but it’s complex. Professional advice is essential.
At CBM Mortgages, we can:
- Connect you with experienced conveyancers
- Structure your loan for shared ownership
- Find the right mortgage for your situation
👉 https://cbmmortgages.com/first-home-buyers/
👉 Or read more on our https://cbmmortgages.com/blog/
📞 Contact us today to start your co-ownership journey the right way!
External Resources
- https://www.domain.com.au/
- https://www.fairtrading.nsw.gov.auNSW Fair Trading: Co-Ownership Agreements
Disclaimer
This article provides general information only and does not constitute financial advice. Always consult a qualified financial advisor or mortgage broker before making any financial decisions.
Written by Craig McDonald 08/10/2025
