Should You Buy a Vacation Home With Friends
Buying a Vacation Home With Friends – aka the I-70 Avoidance Plan.
If you live in Denver and love to ski or ride in the mountains, you are well aware of the fiery dragon between you and the prize: I-70 traffic. The reality of day tripping to the mountains on weekends is hindered by the fact that you will be with tens of thousands of others on I-70 both on your way to the mountains and home. And that makes the commute almost unbearable. And affording a place to stay in the mountains can be expensive. So, what are snow lovers to do?
Many people ask me whether it’s a good idea to purchase a mountain property with friends. This seems like a great solution to have access to a mountain property for the weekends, avoid I-70 traffic, and to generate some income with short term rentals while it’s not being used by the owners. Here are some pros and cons associated with this plan:
- Buying with others increases your purchasing power and reduces your monthly costs.
- You can afford a property you might not otherwise be able to afford.
- You have a weekend place to stay when skiing/riding in the mountains.
- You can offset some of the costs with short term rentals.
- You will need to coordinate with your co-owners for use, scheduling, cleaning, etc.
- Your friends will now be your roommates – that could be good or bad.
- People’s plans change in the future and ideal timing for the sale of the property will never be the same for all the owners.
My best advice for people considering buying a property with friends is to over communicate expectations before purchasing the property. Once the property is under contract, a legal agreement should be created that addresses sales and buy outs at a minimum. Other items that owners will need to address is ownership structure (LLC, partnership, etc), short term rental management, cleaning, pets, bedroom assignments (if applicable) and guests, to name a few.
If you are interested in learning more about purchasing vacation property with others, please feel free to reach out to me!
Amy Nakos, JD, GRI, RSPS