Two Christchurch friends have proven it’s possible for first-home buyers to team up to take on the housing market and come out winners.
Sick of paying rent, “just friends” Keeva Irving and Nathan Lewis got together about five years ago to buy a house which they sold last week for $300,000 profit on the purchase price, enough to make a big difference for their respective home ownership paths.
The house on Sevenoaks Drive, in Bryndwr, cost them $550,000 in 2017 and sold last week at auction for $850,000.
Irving is Irish and Lewis is Welsh but Irving told OneRoof both are residents and both work in project management, which is how they met.
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In their mid and late 20s at the time, the pair put their business hats on to conduct extensive research before the subsequent purchase of their house, which they lived in together and sometimes with flatmates to accommodate their separate travels.
Irving says they each saved like crazy for the deposit and they specifically wanted to buy in an area with good schools and good resale.
“We literally got the white board and a cork board out and we had a map of Christchurch and we drew around the school zones. We said ‘we don’t want to go here, here and here and we’re flexible on those areas’.”
Each listed their wants – she wanted a log burner and a garden – and cross referenced against areas, their budget and the number of bedrooms.
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She says they were clinical about the purchase because they knew they were buying to one day sell.
“It was quite hard because we had a lot of people say to us it won’t work and it could get complicated and everything like this so we were quite aware it was a business decision.
“We had to remove a certain amount of emotion and there would be times when he’d be travelling and I would take on the responsibility and vice versa.”
Irving says they did not have a watertight legal agreement, saying they were told because they were not a couple they would have been affected by the bright-line test if one of them wanted to buy out the other.
The four-bedroom house on Sevenoaks Drive, in Bryndwr, cost the pair $550,000 in 2017. Photo / Supplied
But they each made their will which involved having a conversation about what would happen if one of them died and the result was an agreement that one person would have first option to buy the other out.
Sometimes there were difficult conversations over the years and sometimes it was difficult to work out the financial split exactly when one of them was travelling, but Irving says it has worked out around 50/50 and they have not had a cross word.
They remortgaged last year to take out $60,000 each and Irving says with the sale of the house each of them will get around $140,000 once the legal fees and commission are taken out.
That is money each can use for their current properties – she has bought with a partner and Lewis is building with a partner.
Her advice for anyone contemplating buying with a friend is to make sure there is mutual trust.
“Don’t just go in with someone because they’ve got some money. You have to trust. You have to be able to have those difficult conversations but continue the friendship, and you have to be able to pull your weight and know they’ll do theirs and look after each other and be open and honest financially.”
Irving and Lewis said they were attracted to the house because it was in a good neighbourhood and had access to good schools. Photo / Supplied
The pair both had full control over the finances and also had a kitty of money so if something needed doing, they could access the kitty and get it done.
For this pair, the end result has been fantastic. They were happy with a pre-auction offer of $760,000 which brought the auction forward but on the day they watched rapid bidding send their profit up: “I’m still quite shocked,” says Irving.
Rachel Dovey, general manager of sales for Bayleys Christchurch, said not many friends bought together but Irving and Lewis had an exceptional trust level to make the deal work.
“It’s not common. I think you’ve got to have very good friendship and you’ve got to have a good financial understanding.
“You’ve got obligations to the bank and when people are coming in and out, like flatmates, you’ve got to keep your ducks in order.”
Dovey acknowledges it is probably easier for first-home buyers to get on the housing ladder in Christchurch because prices are lower than in Auckland and other centres.
“The median sales price is in the $700,000s so technically a 10% deposit is a lot cheaper than $1m sale which is $100,000.
“We do see a lot of young people who own property here and values have gone up so some of those people bought at $400,000 or $500,000.”
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