Know what co-ownership can do for you
You are here because you see an opportunity in co-ownership. You may like the idea of having a community by your side sharing the ups and downs of life or you may be struggling with the high cost of entering the housing market and see co-ownership as a way to get it. Whatever your reason, you feel that co-ownership has the potential to provide you some specific benefits.
As you get started, it is important to be able to identify and prioritize what those benefits are. This will help you make sure that you design the perfect co-ownership solution for you
Lesli’s reasons for co-ownership
I bought my first house with my good friend Anne years ago and I still remember exactly what drove this decision.
I was a single mother with a fairly limited income and was a renter. I wanted the security of owning but knew that I could not afford anything on my own. It was over a weekend away that my friend Anne and I discussed the idea of buying something together.
We did not know if it was possible and there was very little information available. It was by luck we found a real estate agent that believed we could find a property and a credit union that would lend us money.
At that time we did not give much consideration to a legal agreement. Luckily all went well and after a number of years we sold and were both able to purchase property of our own. Co-purchasing got us into the real estate market, and although the market was less difficult to get into in 1990, co-purchasing was the only way in for us.
I believe that today’s market requires us to think creatively and to pool our resources to live healthier lives. Thinking differently about ownership can help us establish both financial well being and social supports.
In my opinion, the value of having others around to participate in looking after your kid, walk the dog, help carry heavy loads, shovel the drive and just say hello is worth way more than any inconvenience of co-ownership.
Know your needs and wants
Once you know why co-ownership is valuable to you, you can then start to think about your needs and wants. This is critical to helping you choose the right co-ownership partner. You want to ensure that your partner is someone who shares your vision and approach.
Knowing your needs and wants will be very helpful for working with your real estate agent or builder. You can use the GoCo Wants & Needs List to help you evaluate properties and ensure that you are getting what you want.
Case Study: Lesli & Anne's Initial Needs & Wants
|Lesli Need||Lesli Want||Anne Need||Anne Want|
|Budget (Mortgage, Utilities and Taxes)||Maintain costs below $1,100||Maintain costs below $1,500||Maintain costs below $1,200||Maintain costs below $1,200|
|Location||Near transit with access to daycare and a school with an after school program.||Easy access to green space, parks and a recreational centre.||Easy access to a major highway for work.||A quiet street with access to green space and parks.|
|Walkability||Safe for kids, with lots of ammenities and a green grocer.||Access to sufficient ammenities that you do not need a car to shop.|
|School Board attendance areas||No specific requirements|
|Neighbourhood character||Older neighbourhood||Progressive neighbourhood with diverse families||Older neighbourhood|
|Ownership structure||50% each||50% each||50% each||50% each|
|Outdoor space||Backyard||Large backyard||Garden area|
|Balcony / Deck||Deck for BBQ||Private area||Private balcony|
|Appliances||Gas stove||Gas stove|
|Basement apartment||Not a priority||Would be great for income||No||No|
|Other||Hardwood floors||Radiant heat||Hardwood floors||Natural gas heating and A/C|
|Level of renovation required||Very little||None||Very little||None|
|Level of maintenance required||Something managable (Do not like to garden)||Prefer no grass and garden||Garden with low upkeep||Garden front and backyard|
|Heating||Natural gas||Radiant heat||Natural gas||A/C|
|Access to parking||Street parking||Private parking||Private parking||Private parking|
Understand how you could design co-ownership to best meet your needs
As co-ownership is a new concept, we often think about it in a specific way. Some people think about it as two families co-owning and sharing a home. Others think about it as a family co-owning a home with an investor who does not live with them.
Co-ownership is basically an agreement between 2 or more parties to purchase an asset together. As individual parties, you have the opportunity and right to shape it as you like, taking into consideration the needs of any financial lenders.
Regardless of how you currently think about it, there are a breadth of options you can consider. For example, you can have 2 partners with equal share and equal decision-making power, or you can have 1 partner with a majority share and 1 or more investors, or you could have 3 partners who live in the house and 1 investor all with an agreement to consensus based decision making. The design is basically up to you.
Lesli’s co-ownership agreement
Once I decided I wanted to buy a home with a friend for stability and community, I knew I wanted independent living space with some shared outdoor space. I was open to different ownership shares but did have a preference for 50% which is how we structured it.
Understand where you are and what you need to move forward
Now that you know what you want (the benefits you are looking for) and the different types of co-ownership that you are open to, you need to understand where you are at so that you can build a path to where you want to go
The first step here is to understand your financial situation. How much down payment do you have? How much could you afford on a monthly basis in mortgage, utilities and maintenance?
A good place to start is with your rental payments today. You are likely already paying a monthly sum for housing. Knowing that you can afford at least that amount in mortgage and expenses will give you a good starting space. You can then estimate numbers for your potential partner to get a gauge of the possible purchase value.
This is a good opportunity to learn more about mortgages and affordability.
Below are links to some great information and calculators:
Mortgage information from the Government of Canada:
Mortgage Insurance information
Information for first time homebuyers
Information to help you calculate your affordability range:
Ultimate Mortgage Homebuyer's Tool Box