What are the pros of buying a house with your mates?
The most recent figures from QV reveal that the average New Zealand house costs a hefty $627,905. This means the average Kiwi home buyer needs a deposit of more than $125,000 – a pretty big ask for your everyday Joe Bloggs.
What’s the solution?
Buy with your mates.
Combining your resources with a group of friends, colleagues or family members can be a savvy way to buy your first home. Here are three of the biggest advantages:
- Shared upfront costs
The number one benefit of buying a home with others is that you share the burden of the deposit, which is by far the largest obstacle for any first home buyer. Pooling together multiple Kiwisaver funds, savings and incomes makes it exponentially easier to save for the requisite 20 percent down payment that most banks require, and provides you with a relatively pain-free path to getting on the property ladder.
- Shared ongoing costs
In addition to the shared upfront costs, buying a house with mates also means you’ll be splitting the ongoing expenses. The costs of maintenance, repairs, renovations and loan repayments are typically divided up between buyers, which helps make home ownership that much more affordable in the long run. Remember to use NZ mortgage rate comparison calculators to take full advantage of your group’s finances.
- More options
Finally, purchasing property as a collective provides you with more options when it comes to buying. For example, with your combined capital, you may find that you’re able to secure a larger home or buy in an area that you wouldn’t otherwise be able to afford
While buying a home as a group does offer a lot of benefits, it’s important to keep in mind that there are some disadvantages to purchasing a house with mates, too. As always, be sure to weigh up the pros and cons before diving in.