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Vol. 14 No. 52 - October 22, 2014

REAL ESTATE

Co-owning a vacation home

 

Most people have the dream of owning a vacation property at some point in their lives. Whether you want to be at the beach or in the mountains, owning a second home may sound romantic and exciting, but it comes with a price and generally a really big one.

Once the domain of married couples or family compounds, more and more homebuyers are discovering the advantages of teaming up with a friend or relative to buy a house. Since in 2013, the sale of vacation home sales rose almost 30 percent, it’s obvious that this market is expanding especially in the South where 41 percent of those purchases where made.

The price of second homes is rising, and it’s becoming harder for individuals to put together the cash necessary to buy one on their own. In addition, the cost of maintaining a vacation property compounded with adequate vacation time to use the property is driving the culture of partnerships for the purchase of vacation homes.

So what’s involved and how do you organize this kind of partnership, which is really akin to a marriage with the same risk of failure and battles? First of all, who you choose to partner up with is essential, even your best friend or twin brother may not really be thinking the same way as you. These are some of the key issues to get settled way before anything is signed:

Naturally, the budget. What price range fits your financial needs? Assuming you have already agreed on location, the decision needs to be made if the property will be used strictly for the principals or will it be offered for rental to defray some of the operating costs. Are you purchasing a single family home or a vacation condominium? Condominiums are easier to manage since most of the maintenance is taken care of at a set price, but single family homes can be overseen by a property manager as well.

How will the property be deeded? It's an important point which requires input from an attorney as to the best way to handle this, i.e. tenants in common or joint tenants. Many properties are held in a limited liability corporation, which keeps the buyers’ personal finances separate from the property. Either way, a separate bank account to handle the property expenses should be established so there are no co-mingling of funds.

What about usage? Is there a set schedule or are you going to try and adjust the schedule based on vacation availability, kids’ school schedules and seasonal weather? Will owners have specific responsibilities, who’s the bookkeeper and who calls the plumber or electrician? And maybe the most important is what happens when one person wants out or the relationship just isn’t working? Having a formal co-ownership agreement will eliminate the need to hash out what to do at an emotional time.

Finally, the more people in the partnership the more room for problems to arise. Buying a million dollar property on the beach with five couples may sound wonderful, but when have you ever found 10 people to agree on anything including where to have dinner? Sometimes less is more, and the two-bedroom cottage a block from the beach with one partner may really be the best choice.

Co-owning a vacation property is more like navigating a corporate merger than successfully sharing your crayons in kindergarten. But having cocktails on the beach in February with your best friends may make it all worth it.

Real Estate Transactions
As of August 31, 2014
Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

08/13/2014 649,000 589,000 112 Hammock Rd. 2009 85x112 3 Br/2 Ba SFR
08/15/2014 697,500 660,000 208 Lakeview Dr. 1408 75x110 2 Br/2 Ba SFR
08/15/2014 749,000 725,000 519 South Dr. 1582 60x110 3 Br/2 Ba SFR
08/04/2014 895,000 895,000 316 Tarpon St. 2351 4 Br/3 Ba SFR
08/20/2014 1,195,000 1,079,000 218 Archer Way, 2712 4 Br/3.5 Ba SFR
08/06/2014 350,000 350,000 70 North Shore Dr. 836 54x78 2 Br/1 Ba Half Duplex

Bradenton Beach

08/22/2014 199,000 189,000 1801 Gulf Dr. N. # 215 691 1 Br/1 Ba Condo
08/29/2014 379,000 372,000 117 10th St. N. 121 1027 2 Br/2 Ba Condo
08/23/2014 625,000 625,000 2600 Gulf Dr. N. # 24 1195 2 Br/2 Ba Condo
08/29/2014 199,000 189,000 103 Gulf Dr. N. 1200 53x100 Com
08/18/2014 599,000 599,000 2412 Avenue B 2984 50x100 Inc

Cortez

08/06/2014 165,000 155,000 9604 W Cortez Rd. 224 1218 2 Br/2 Ba Condo

Holmes Beach

08/20/2014 549,900 540,000 218 85th St . 1534 90x100 3 Br/2.5 Ba SFR
08/15/2014 595,000 560,000 210 55th St. 2185 131x105,70,118 3 Br/3.5 Ba SFR

Holmes Beach

08/12/2014 599,900 572,000 4005 5th Ave . 1994 3 Br/3 Ba SFR
08/20/2014 599,000 585,000 312 61st St. B 1707 3 Br/2 Ba SFR
08/29/2014 599,000 585,000 628 Foxworth Ln. 2334 100x115 3 Br/2 Ba SFR
08/22/2014 675,000 627,500 518 Bayview Dr. 1250 75x120 2 Br/2 Ba SFR 08/05/2014 699,000 675,000 6201 Holmes Blvd. 1822 101x78 5 Br/3 Ba SFR
08/01/2014 749,000 705,000 214 82nd St. 1536 90x90 3 Br/2 Ba SFR
08/01/2014 873,500 837,500 514 Bayview Dr. 1841 75x120 3 Br/2 Ba SFR
08/12/2014 965,900 900,000 684 Key Royale D 3003 4 Br/3 Ba SFR
08/13/2014 1,249,000 980,000 8407 Marina D 2164 80x125 3 Br/2 Ba SFR
08/22/2014 1,499,900 1,400,000 3007 Avenue F # 1 & 2 2200 4 Br/4 Ba SFR 08/04/2014 232,000 215,000 4307 Gulf D 206 1027 2 Br/2 Ba Condo, Short Sale
08/13/2014 395,000 370,000 6500 Flotilla D 174 1622 3 Br/2 Ba Condo
08/15/2014 418,000 410,000 5200 Gulf D 508 1169 2 Br/2 Ba Condo
08/13/2014 597,000 573,500 244 S Harbor D 2 1330 2 Br/3 Ba Condo
08/07/2014 649,900 650,000 5608 Gulf D 215 1092 2 Br/2 Ba Condo
08/29/2014 1,725,000 1,700,000 7310 Gulf D 5 1952 2 Br/2.5 Ba Condo
08/22/2014 675,000 627,500 518 Bayview D 75x120 Vac
08/01/2014 425,000 395,000 3004 Avenue C 150x10 Vac
08/21/2014 650,000 405,023.85 8101 Palm D 1971 90x115 3 Br/2 Ba Inc, Short Sale
08/04/2014 519,000 493,000 306 65th St 1300 90x105 3 Br/2 Ba Inc
08/08/2014 419,000 380,000 4603 Gulf Dr # A 1334 50x100 4 Br/2 Ba Inc

Source: Manatee County Property Appraiser’s Office


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