Feb
2013
Cohabitation and Buying a Condo: Our Way
Photo Credit: Concert Properties Ltd. via Compfight cc
Apparently the definition of cohabitation is “the act of living together and having a sexual relationship (especially without being married.)” – wordnetweb.princeton.edu
Gee, thanks for reminding me Princeton 
As some of you may know from my post about first impressions of moving in with my boyfriend, J and I now live together. It’s not as rosy as it was when I first published the post, but it’s still pretty darn amazing on most days. I think if I could sum it up in one word for anyone out there who is thinking of moving in with their significant other, be ready to “work.” There are going to be things that will annoy you, gross you, piss you off, but if you work at getting past those things together, then the result is one step forward in your relationship!
J also wants to buy a condo this year because he is tired of putting money towards rent every month when he could be putting it towards something he owns. I want to buy a condo as well. Since we are in a relationship and already living together it was assumed that we would be buying a condo to live in together as well. There’s just one little problem. I have huge debt. J does not. Not only does he not have debt, but J has savings that is rare for “normal” guys his age. He’s already pre-approved for a decent size mortgage with a low-interest rate, while I had to work my magic to convince my bank to give me a measly 13,500 personal loan to consolidate my credit cards. What do we do?
Luckily, J and I are very open about our finances and I think we came up with a solution that is fair to both of us. (Well technically I came up with the solution and J just happily agreed to it )
J will buy the condo on his own so it will be in his name only, and I will rent from him. I will pay half the mortgage as “rent” but if any landlord issues come up, like renovating or fixing up the place, he will be financially responsible for all of it. If we buy any new furniture for the place, then it will be 50/50. This way, if we were ever to break up, I could walk away without any complications.
In an ideal world, we would want the condo to be in both our names so that it could truly feel like it belongs to us both, but in the meantime, I will work hard to pay off my debt and when the time comes to upgrade, I will be able to financially contribute as well. I do have to give J credit for taking in some of my ”must-haves” for a condo into consideration while we are looking at different places. One of those “must-haves” is to have in-suite washer and dryer. I’m still working on the walk-in closet, but perhaps I shouldn’t push my luck too much 
For all you other cohabitators (married or not) out there, how do you, or would you handle buying a home when only one partner has debt?
Melinda Gonzalez
February 27, 2013 at 11:04 am (85 days ago)I think what you did was actually the best option.
Not to jinx you, but if you were ever to break up it would be much easier to part ways. If it was under both your names, it would be a mess to work out.
Of course that would never happen, but just in case
Girl Meets Debt
February 27, 2013 at 11:33 am (85 days ago)Thanks Melinda. I feel it was the best option for us as well
pauline
February 27, 2013 at 11:17 am (85 days ago)I used to share a flat with my ex bf and when I bought my own, he moved in. I did something similar and charged him rent, about 30% lower than the previous place which was really bad, plus I put 25% down (and didn’t charge him the lost savings interest either).
. I think it is good the idea came from you, and it is fair if you would pay rent elsewhere either way.
That is when his parents declared an open war, saying I was a real estate bitch, building equity while he was still throwing money out the window renting, etc. they broke us off 6 months later. Other than this, congrats
pauline recently posted..Installing a water pump: costs and tutorial
Girl Meets Debt
February 27, 2013 at 11:36 am (85 days ago)Yikes. Sorry to hear about the ex bf and his crazy parents! With my current financial situation being the way it is, I know that I won’t be able to buy and build equity for myself in a LONG time. I accept that fact though so I don’t want to hinder J in his attempts to build equity.
mochimac
February 27, 2013 at 12:09 pm (85 days ago)I like that idea of him having it all in his name, and you paying rent.
Points I’d bring up:
1. Is that a fair price for rent in such a building? Just because it’s half the mortgage, it doesn’t mean it’s fair value of someone renting half of it, and not building or having any equity in their name.
2. Be aware of who gets to keep what furniture (or none at all and the other person pays 50% back of what was purchased). You’d be surprised how people fight over a couch.
3. If you two get married later on (or not), or you otherwise decide that you two want to have your name on the condo as well, I believe you can add your name on it afterwards, even though you have a crappy credit score.
Don’t quote me on that, look into it..
Good luck
mochimac recently posted..Do you ever feel guilty for everything that you have and make?
Girl Meets Debt
February 27, 2013 at 12:15 pm (85 days ago)Thanks for the tips Mochi
I will definately bring those points up.
P.S. Suprisingly, I have quite the good credit score! *faint in shock* But we all know how effed up credit score is
John S @ Frugal Rules
February 27, 2013 at 12:53 pm (85 days ago)I think you came up with a pretty good option and probably the best one available. I also like the setup of him taking care of any of the “normal” landlord type issues as he probably should since it’s in his name. I know it’s been mentioned, but the furniture could become an issue if ever you were not together. Maybe it could be the person who wanted it paid some sort of value to the other so the person without the furniture would not be left high and dry.
John S @ Frugal Rules recently posted..Taking the Plunge: Why I Hate Being Self-Employed
Girl Meets Debt
February 27, 2013 at 1:46 pm (85 days ago)Great tip about the furniture John. I’m glad I wrote this post because you all add in such insightful things that I haven’t even thought of yet.
anna
February 27, 2013 at 1:03 pm (85 days ago)That’s funny about the walk-in closet – when B asked me to move in, my contingency was that I got the walk-in and he got the cruddy sliding door one.
He already owned the place so I just pay him a set amount, and we’ve never really had a conversation about future homes, just places where we think we’d like to settle. I guess time will tell… I think your agreement is ideal, good job thinking of it!
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Girl Meets Debt
February 27, 2013 at 1:48 pm (85 days ago)A girl’s gotta have her walk-in closet!
Do or Debt
February 27, 2013 at 1:42 pm (85 days ago)I think you’ve made the right decision. It makes sense to have his name on the mortgage while you get out of debt. Something I have thought about is should partners pay the same in rent if one person makes more money and has no debt? It’s a tricky issue. My partner and I live together (and it’s not always easy, that’s for sure!) and we split rent. I am hoping once we are more settled, he can pay more while I pay off my debt, then we will switch.
Do or Debt recently posted..What’s the strangest thing you’ve done for money?
Girl Meets Debt
February 27, 2013 at 1:51 pm (85 days ago)Not going to lie, the equal rent is something I have thought of too. J does pay for most of the groceries and our dates out together so that alone has helped me speed up my debt repayment so far…
eemusings
February 27, 2013 at 3:12 pm (85 days ago)Yep, sounds like a smart option all around!
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Girl Meets Debt
February 27, 2013 at 3:54 pm (85 days ago)Yup, for now it’s the smartest solution for us
The Asian Pear
March 2, 2013 at 9:36 am (82 days ago)Agreed!
Couples have to do what’s right for them and be smart about their own finances at the same time. As long as you two are open about the conversation, it’ll be a good arrangement.
kathryn
February 27, 2013 at 3:44 pm (85 days ago)I’d also suggest, when something is purchased for the home, one of you actually buy it and not split the cost.
Maybe keep a running inventory list.
My daughter and her boyfriend are in a similar situation. He bought the house and it is in his name only. She has terrible credit.
Girl Meets Debt
February 27, 2013 at 3:57 pm (85 days ago)It’s nice to know that others are in similar situations. Most couples that I know who live together before marriage either rent or they both own a condo together. J and I are going to be different…
Budget and the Beach
February 27, 2013 at 6:52 pm (85 days ago)Congrats on making that step! I think that sounds like a great plan!
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Girl Meets Debt
February 27, 2013 at 7:37 pm (85 days ago)He hasn’t bought a place yet, but looking at different condos is making me super excited
kathryn
February 28, 2013 at 4:25 pm (84 days ago)We considered buying a condo, but decided against it, because of the uncertainity of the condo fees.
There are other options, and wondering if you have considered them? A house that may be more expensive, but when you consider the price of condo mortgage + fees, is the same as a house mortgage payment.
We purchased a 5 unit apt building, and our 4 adult children took the other units. We share all the expenses, making it realling cheap. If they were actual tenants, we would be living rent free, because the rent would be higher.
Buying a duplex, and renting out the other side, possibly living rent free, or at least close to it.
Buying a house with lots of bedrooms, and renting out rooms to boarders (not roommates).Boarders are your tenants and must follow your house rules. These people have less protection, because you actually live in the house.
These ideas might mean less privacy, but it can be a really big boost to your income.
Can you tell that we are landlords?
Girl Meets Debt
February 28, 2013 at 4:36 pm (84 days ago)Kathryn, I live in Vancouver. Just google average price of homes here and you can see why we can’t afford to buy. I have immense debt so it’s only J purchasing the condo this time around. In a few years when my debt is paid down or paid off, we would upgrade to something bigger and then rent out the condo for extra income. That’s the “plan” anways…
Laurie @the frugal farmer
March 1, 2013 at 5:03 am (84 days ago)I think you guys have a pretty good plan figured out. Also, I love that you talked about that a relationship, especially when living together, is work! I think it’s easy to forget that. Can’t wait to hear all about your new living quarters when you find that perfect place!
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Girl Meets Debt
March 1, 2013 at 5:59 am (84 days ago)Thanks Laurie. I can’t wait to blog all about the new living quarters when we finally find it
Johnny Moneyseed
March 7, 2013 at 10:50 am (77 days ago)I personally would want to rent together until marriage. Even though it may seem like a waste of money, it would be very weird to continue to own a place that you and your ex used to live in together. If it works for you guys then I’m glad!
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