Buying a Home With Friends: Benefits, Risks and Contract

Buying a home with friends is a way to split the cost of a property among people who aren't related, whether for shared housing during a particular stage of life or as a joint investment meant for rental income. It works like any other co-ownership: each friend appears on the deed (escritura) with an ownership percentage proportional to what they contributed to the down payment and to later expenses. The difference from buying with family is that, without blood ties, it pays to be even more explicit in writing, because the unwritten codes that often soften family conflicts don't always exist between friends when a real disagreement arises.

Benefits and risks of buying with friends

The main advantage is lowering the amount each person needs for the down payment and monthly payments, in addition to sharing the risk if the property is intended as a rental. It can also give you access to an area or type of property that would be out of reach if you bought alone, and it spreads the responsibility for maintenance among more people. The main risk is that friendship is no substitute for a legal framework: if one of the friends stops paying, wants to sell their share, or simply changes their mind about using the property, there are no rules for resolving it without a clear contract, and those disagreements can end in long legal battles as easily as in the permanent end of the friendship.

What a co-ownership contract should include

Before signing the joint deed, it is highly advisable to draft a private agreement, ideally reviewed by an attorney, that covers the following points:

• Each friend's ownership percentage based on their actual contribution to the property.
• Rules for use if you will live there together, or for splitting the rent if it is leased to third parties.
• How maintenance costs, predial (property tax) and major repairs will be divided for as long as you hold the property.
• A clear process for one owner to sell their share without harming the other co-owners.
• What happens in the event of the death or insolvency of any of the co-owners.
• A right of first refusal so the other friends can buy that share before a stranger does.

When buying with friends isn't a good idea

Buying together is not the best option in every case. If any of the people involved have very different life plans in the short term, such as moving to another city or a radical change in their financial situation, co-ownership can become a complication rather than an advantage. It's also not a good idea if there is no real willingness to put the agreement in writing and consult an attorney, since relying solely on your current good relationship doesn't protect any of the parties if circumstances change over time.

Frequently asked questions

Can I get a joint mortgage with friends?

It depends on the bank: some allow joint loans (créditos mancomunados) with several co-borrowers, but each institution has its own requirements, so it's best to check directly with several banks before deciding.

What happens if one friend wants to sell their share and the others don't?

The co-ownership contract should anticipate this scenario, for example by giving the other co-owners a right of first refusal to buy that share before it is offered to a third party outside the group.

Is it advisable to form a sociedad civil (civil partnership) instead of everyone appearing on the deed?

It can make sense when there are several co-owners or when you want flexibility for partners to join or leave over time, since it avoids amending the deed each time; consult an attorney about which structure fits best given the number of friends.