As a single person it can seem the real estate market is stacked pretty heavily against you – couples can usually rely on two incomes, have access to two KiwiSaver accounts, and are eligible for two First Home grants.

But just because you’re not in a relationship doesn’t mean you have to go into buying a property entirely on your own – you can buy a house with a friend (or more than one) as co-owners.

There are two ways that more than one person can own a house – joint tenancy and tenancy-in-common.

Joint tenancy is more suitable for couples – it automatically gives both parties an equal stake in the property; and if one person dies, their share of the property goes to the other person.

Tenancy-in-common gives each owner a distinct share in the property, which can be divided in any way. If one person dies their share of the property goes to their estate.

There is obviously an element of risk in co-owning with friends – what if the friendship goes south?

The biggest financial risk is that although you will only own a share of the house, you will be liable for the whole mortgage – so if one person can’t keep up with their mortgage repayments then the other owners have to cover the shortfall.

It’s also worth noting that as long as you have a mortgage together, your credit record will be linked with your co-owners – so any financial irresponsibility by one party affects the others.

Co-ownership could also hamper your ability to buy further properties – a bank will consider only your portion of the house as your asset, but the whole of the mortgage as a liability – since if things go bad you are on the hook for the entire amount.

If you’re going into this type of buying arrangement, it’s very important that a lawyer draws up a property sharing agreement which details each person’s share in the house. It is also worth having a legal agreement that sorts out what will happen if one person wants to sell, if one person doesn’t want to live in the house but the rest do, how much insurance each person will need to have, and any number of other contingencies. It can be tempting to say “We’ll sort that out as we go along” – but it’s much more sensible to know what could happen from the beginning.

The loan will usually be issued as one mortgage against the property, but split into parts – so you can structure your part of the loan in the way you would like, be it fixed, floating, or capped. This may mean one owner pays their part of the mortgage back faster than the others. Even if that happens, they are still jointly and severally liable for the mortgage for as long as the others owe money.

And a final note – it can be tempting to look at co-ownership with two or three other people as a good way to get more Government grant money. However, even if more than two people are eligible for $5000, the First Home Grant will only pay out a maximum of $10,000 per house.