What Is Co-Ownership / Co-living?
Co-ownership is when two or more people have ownership of Real Estate and are named on the title. Co-living is when these individuals also decide to live together in shared accommodations. Co-Ownership can take many forms. A group of 6 friends who combine their assets to buy a house in Scarborough. Three siblings buy a 3 bedroom condo unit downtown and share the accommodations. Two couples buy a house in the Annex agreeing to take one half of the house and only share the common areas.
Why are people considering CO-OWNERSHIP / CO-LIVING?
As real estate prices in Toronto climb to astronomical heights, co-ownership with friends, siblings, and colleagues is on the rise. It is a non-traditional method to gain access to property that otherwise would be financially out of reach. With the average condo in Toronto being priced at over $600,000, even those earning six-figure salaries are finding it difficult to purchase a home. Co-ownership allows people to combine their assets to purchase a property.
Co-living is a lifestyle where family, friends, siblings, colleagues or strangers who have pooled their money together to buy a property, decide to also share those accommodations. Co-living involves shared common spaces as well as surrounding yourself with people and may also be a necessity due to the increasing prices that make individual ownership in Toronto almost impossible.
Advantages and disadvantages of co-ownership / co-living
The pros:
- More affordable housing
- Being able to choose the people you live with
- Being able to purchase a larger property through the pooling of funds
The cons:
- Having to live with other people
- Little to no privacy because of shared communal spaces
- Shared errands/chores
- finding a lender
- Risk – what if one co-owner fails to pay their share? What if one person wants to sell their share?
- Who pays for the maintenance fees?
Finding a lender
A typical mortgage might have one or two people on the title. If you are pooling your money with 4 or more people, obtaining a mortgage starts to get tricky. You will find that the major lenders won’t have a loan product available to you, however, you will find success with non-traditional lenders like Credit Unions or independent lenders. Here are three that have loan products specifically geared towards co-ownership:
Luminus Financial
DUCA Credit Union
Estonian Credit Union
If you decide to proceed with co-ownership / co-living – take this into consideration:
- All parties should agree to contribute equal amounts towards the down payment
- All parties should share in all expenses equally with regards to maintenance and upkeep. This includes mortgage payments, maintenance fees, utilities, insurance, and property taxes.
- Create a cohabitation agreement that will detail each owner’s rights and responsibilities.
