# Co-owning part 2

Last week I suggested looking into buying homes with a partner(s). I am going to display a few scenarios why this works. Disclaimer; mortgage rates used here are 3.5% and payments are close but not exact due to fees and levies that may be applied and taxes are approximate for the value of suggested properties.

If a person purchased a home for \$350,000, (which should be easily be a good home in Brandon, MB for three people), the monthly payment would be about \$1700 mortgage, \$350 taxes, and \$250 utilities, for a total of about \$2300 per month. Let's take that for three people; \$6,900 per month. Now if three people live in the same home; \$767 per month each, even if you added a little for more utilities it would still be under \$800.

Now let's take that \$700,000 from the other two homes and buy a four-plex, the incoming rents should be \$1,200 per month per suite, for \$4,800 per month. Divide that by the three people and each is taking home \$1,600 per month or clearing \$800 plus after paying into the home they live in. That shows a \$1,500 swing per person from owning individual homes.

Why not just rent a little longer until you can buy on your own? If you are renting from the above four-plex at \$1,200 per month you paying \$14,400 per year and never seeing any of that again. If you purchased a home for \$225,000 your mortgage payment would be about \$1,070 per month with taxes about \$200 per month. That becomes about \$604 in interest and \$464 in principal per month in the first year. Every year the principal portion gets larger and the interest gets less. Quick math shows the money that's gone is about \$800 (interest and taxes) per month and the money you're putting towards equity is about \$460.

Now buy a place with a friend or two....if you were buying the \$350,000 home your approximate mortgage payment would be \$1,700 per month of which \$939 per month is interest and \$720 would principal in the first year. Remember that equity would be shared.

As I said last week, have a good legal partnership agreement in place and consult a mortgage professional for exact numbers.