coHome is a recently-launched Australian start-up that helps young people gain a foothold into the homebuyers’ market by providing a simple way for a group of people to invest together.
After numerous conversations with millennials who found themselves priced out of the housing market in both Melbourne and Sydney, coHome founders Josh Littin and Damian Horton decided to act.
“We were talking to a lot of younger people – millennials - who were attempting to buy a home and the prices were just out of reach – the median house price in Sydney is now $1 million," Littin told PPW.
"So, it’s really hard to imagine buying a house like that if you’re only 25 years old. This prompted us to think about what the alternatives could be."
How the platform works
coHome’s online portal allows customers apply for a home together and then easily manage and coordinate the key components that comprise a property transaction: getting a mortgage, finding the property and drawing up a co-ownership agreement. The coHome platform has an easy-to-use dashboard and is plugged into the REA Group’s portal, giving users the option to search for a property if they haven’t already found one.
Littin says what sets coHome aside from other similar platforms is its tight legal contract and straightforward functionality.
“In a nutshell, coHome is an online platform that enables you to easily form a group to apply for a mortgage, with the most important factor being the legal contract,” he says. “So, if you’re buying a home with other people, there’s a lot of room for things to go wrong. What happens if someone doesn’t pay? What if someone loses their job?"
These are all legitimate questions and what strengthens coHome’s offering is the tight legal framework it provides – a necessity when multiple people are buying a house together.
What makes coHome different?
“We’ve got a really strong legal contract that could cost you up to $1000 and we give that away for free to our customers,” Littin says.
“Generally what happens is that you would go to your mortgage broker or bank to do the finance part of a contract and then visit a lawyer. A lot of this process is actually geared at singles or couples. No one really says they’re able to help you as a group,” he explains.
“There are a few guys that do the legal contract through an online portal but no one really wraps it up they way we do and that’s why we thought this was a niche to go after. We’re really interested in the share economy!"
Who will use it?
Littin says the platform is geared towards anyone who wants to buy a home together, be it friends, relatives, or even parents who might put money towards a home for their children, in a bid to increase its buying power.
“We want people to buy a house they actually want to live in,” Littin says. “A lot of people say, ‘oh buy a house in Cranbourne and rent in Coburg because you want to live there.’”
“Why not just buy a house with friends in Coburg, because that’s an area that is going to go up in price.”
The home ownership journey is one that can change over time according to Horton, and this is where flexibility in an agreement is important.
“People might be looking to buy a home when they’re young but when they’re older they might have a family and look to buy the entire house for themselves,” he told PPW. “So, there’s obviously the transition from this co ownership to owning a whole house.
“If you’ve built up equity in that shared purchase, one of you might sell or will want to leave before the others, but then you might become an investor in the house. We have lots of flexibility in how the mortgage agreement is structured.
Future of the platform
While still in its nascent stages – the platform recently had its soft launch and has already received registrations – Littin says future plans are already on the horizon.
“Down the track we could look at matchmaking – so pairing buyers with one another. For example, I might be looking for a place in Fitzroy and I’ve got a certain amount of money and want to seek others who are in the same boat.
“Initially we’re going with a very MVP product and then we’ll build out where it makes sense - so whether that’s working with banks to create better home loans or doing stuff with smart contracts. At a basic level, we can help people buy a house together and give them a really solid legal contract and we’ll see where that goes for the next 6 to 12 months.”