Despite having a decent deposit, Bianca was concerned her income wasn’t high enough to commit to buying a first home on her own. So it seemed like a golden opportunity when her friend Jade suggested they buy a place together.

Jade ticked all the boxes: good job, stable income. And when Bianca explained she was keen for the property to be a long term investment – one they would hold onto for at least five years or more, Jade agreed.

Very sensibly, the two women opted for a written agreement that formalised each co-buyer’s ownership in line with the deposit they contributed. The split of 60% Bianca: 40% Jade, would also carry over into costs such as repairs and maintenance.

The two settled on an apartment, and as first home buyers they were able to tap into the first home owner grant. With a growing number of lenders recognising that first home buyers are increasingly buying with a friend or family member, securing a home loan was straightforward.

The bombshell hits

The first year of living in their co-owned apartment was smooth sailing though Bianca recalls, “I did notice that Jade’s boyfriend started to stay over quite a lot, and it got to the point where he was virtually living in the apartment full time.”

It was a little over 14 months into the arrangement that Jade dropped a bombshell. She and her boyfriend had made an offer on a place they wanted to buy together, and she wanted to bail out of her stake in the apartment.

“Selling the apartment wasn’t part of my plan – I wanted to hang onto it,” says Bianca. “But Jade was in a hurry to sell.”

What followed was something of a compromise where the two women continued to own the apartment. Though with Jade now living with her boyfriend, Bianca was left sharing the unit with a succession of tenants.

After eight months, Bianca decided she’d had enough and the apartment was listed for sale.

A valuable start in the market

Happily, Bianca’s story does have a positive ending. She explains, “Co-buying the apartment gave me a valuable start on the property ladder, and once the property was sold I was able to buy a block of land – which I’m still deciding whether I’ll build on to sell or move into.”

Having a written agreement in place for the property is something Bianca still sees as a smart move. “To be fair, Jade always maintained her share of the bills,” recalls Bianca. “What we overlooked was the need to specify an agreed holding period for the property.”

Would Bianca do it again? “Absolutely. I still think buying with a friend is a good way to get into your first home,” she says. “Just be sure you’re buying with someone who has a steady, secure job, and most importantly, make sure you share the same focus and vision. You need to be on the same page especially if you have a long term outlook.”

Talk to your Aussie Broker about how co-buying with a friend or family member could help you take that first important step into the property market. Names have been changed.