Co-purchasing a home was a shrewd financial decision

A five-way, co-purchased home in Spruce Avenue marks a rare and potentially profitable venture for a group of women.

In 2008, Becky McClelland and her four friends decided to buy a house together because they didn’t want to waste money on rent. The house was $562,000 when the five of them signed the deed, along with the 20-year mortgage.

“The conversation started in 2005,” McClelland said. “We were all getting into our late 20s and thinking we should probably be investing in property as many people our age do. None of us was married and so we didn’t have two sources of income. We decided to try to pool our incomes as single women that way.”

One of the original five had sold her condominium, which is what contributed largely to the down payment for the house, and almost everyone borrowed money from family. Beyond signing the mortgage, finding a house able to accommodate five separate people and respective partners was another challenge in itself, even with a realtor.

“We were quite specific in the format of the house; we wanted separate suites for each of the groupings of different people,” McClelland said. “We were originally looking for a house that had four suites because there were four groups of us wanting a place to live. We found one house that had like seven or eight or nine rooms, but they weren’t separated into suites so it wasn’t really what we wanted.”

Finally, with luck, they found a 4,000-square-foot house in the Spruce Avenue area. Some tweaks were needed to create four separate suites, but that wasn’t all. Like many old homes, the co-purchase, built in 1955, required hefty updates on top of renovations. Some of the repairs McClelland and her friends ran into along the way included a new roof and weeping tile.

The house now has one suite on the top floor, one on the main floor and two in the basement. Two of the original buyers still live there and three suites have renters. McClelland and her roommates agreed that any rent charged would go towards paying down the mortgage.

As time went on, McClelland and her friends discovered more benefits to the arrangement than simply financial.

“…we have a legal document outlining how we make decisions, how we pay bills.”

Becky McClelland

For McClelland, one of the benefits was sharing resources like vehicles. “Sarah, my direct roommate, mostly furnished the house and owns a car—and I drive it more than she does!” She added, “We actually just celebrated our 10 years as roommates.”

McClelland said her favourite part of living in a co-purchased home is the sense of community she finds there. “We still have weekly meals together, even with people that have come and gone.” McClelland was surprised to find they often maintained relationships with past renters. “Now our Sunday dinners are only at the house once a month. We go to past renters’ places for dinner a lot now, too.”

McClelland emphasized the arrangement is only for those “in it for the long-haul.” She and her roommates ended up buying out one of the original five purchasers after she got married and moved out. “She hadn’t put much money into the house in terms of repairs and maintenance after the original purchase, so we were lucky and only ended up buying her out about $5,000 worth.”

One of the aspects McClelland attributes to her successful situation is a legal document one of her roommates drew up at the beginning. “Originally, Sarah [an original buyer] was in law school doing an articling with a real estate lawyer, so that person was willing to help her make a united shareholders agreement. So we have a legal document outlining how we make decisions, how we pay bills.”

McClelland said honest communication helps keep the intimate living situation healthy. “We look out for each other and note who has the time and space in their lives to do certain tasks.”

Since selling their condo one and a half years ago, Heather Ritz and her husband have rented one of the two basement suites because they “wanted to do housing differently.” Ritz said that after living in the co-purchased home, the financial and social benefits inspired her.

“Personally, I would love to do a house share model, it makes a lot of sense. If we were to buy a house, we would only buy a house in co-ownership,” she said. “It’s good to see a working model, to see people that are doing it well.”

Both McClelland and Ritz have found a solution to the typical burdens of owning a house and both agree there are many benefits to co-owning, but only if communication and details are worked out in advance.

Featured Image: Becky McClelland co-purchased a home with friends; now, three of the four suites are rented.| Rebecca Lippiatt