It is natural for people to want to stay in their own homes for as long as possible. But as older Australians continue to account for an increasing proportion of the country’s population, there will continue to be an increasing demand on health services as well as indirect economic effects. For an increasing number of people facing retirement, starting a sharehouse before or not long after this point is becoming an attractive option.
Online portals for flatmates have seen a significant growth in the proportion of retirement-age users seeking share house accommodation. While some of this rise is due to people being forced into such living arrangements, many are also realising that entering a sharehouse arrangement with similar-minded and similar-aged people or even multi-generational flatmates can prove economically and socially beneficial.
Tips for starting a sharehouse at sixty
Find similar minds
This is obviously the most important step if you are thinking of starting a share house close to retirement. You will most likely be hard-pressed to find many your age who are willing to return back to their days of student living, but those who are open to the idea should understand that sharing a house later in life is a completely difference experience to sharing in your twenties.
It will take some time to find the right people to live with, especially if you intend on buying property with these people. You ideally want to start approaching potential housemates years in advance.
Once you do find the right people, it’s a great idea to test whether a close living situation suits all of you (especially if you will be entering into a financial arrangement with others). The best and only way to do this is to move in together before making any larger decisions. You could save some time if you are unsure and first go on a holiday with them, but the next step is to move in with them for at least a year to see whether it will work.
Long before you begin any research into homes, have some idea of what you will do once you reach an age that you require care. It is unrealistic that a sharehouse situation can cater to those with increasing healthcare requirements but there may be solutions if you do wish to stay living together, such as pooling your resources and providing accommodation for an inhouse carer.
Establish the finances
Will everyone pool their resources and buy a property, will there be a sole landlord or will you be renting?
If buying a property in which to live all together, will you enter into a co-tenancy/joint tenancy agreement or will you be tenants in common? This is an important thing to understand and decide on as the differences between the two pertain strongly to the potential death of an owner of a property and what the remaining owner’s rights and responsibilities may be.
A joint tenancy is the most common form of financial arrangement that a couple will enter into but this may not fit a group of friends. A joint tenancy means everyone has an equal share in the property despite any difference in contributions made to a mortgage. If there is a death, that individual’s interest in the property automatically transfers to the remaining tenants.
With several people involved in the purchase of a home, some may put more money into the purchase than others. A tenancy in common agreement can suit this arrangement as it caters to differing levels of shares in a property. However, if someone dies, their interest in the property does not automatically transfer to the remaining tenants but becomes part of their estate. This can be solved by stipulating in your will where you want your share to go in the case of your death.
Organise the legal agreements
Organise a co-ownership agreement. It is a legal document that sets out the solutions to a number of scenarios, such as if a member of the share house decides to leave the arrangement, or a couple divorce. The average cost of establishing a co-ownership agreement is between $250-400 but you may be able to get this more cheaply with your existing solicitor.