Buying property abroad and enjoying the benefits of a vacation home is a dream come true. Having a cozy, comfortable, homely base in a beautiful and exotic destination is a fantastic escape from the grind of daily life and takes vacationing abroad to the next level.
However, owning a vacation home can be an expensive business. The financial and logistical challenges of a second property are tough even when it’s in your home country, and the added complications and costs of a home abroad can be off-putting for many.
This is why sharing the costs and responsibilities of a vacation home with friends can be a great choice. It is a great way to make things more affordable as well as spread out logistical tasks and benefit from more varied experiences.
So whether you fell in love with Cozumel after that unforgettable cruise from Tampa or have decided to move to Panama after a business trip, here are a few reasons why you might want to consider buying a property abroad with friends.
Choosing the Right Friends
Compatibility
It might sound a little weird, but it is important to pick friends who you are super compatible with when buying a property together. They need to have similar interests and vacation preferences, as well as being financially stable and committed to the property itself. Being reliable and responsible doesn’t hurt either!
Trust and Communication
Communication is key when sharing financial responsibilities, and you need to be able to trust the people you buy a vacation home with. Conflicts will inevitably arise and you need to be confident you’ll be able to resolve them amicably.
Financial Arrangements
Budgeting
Budgeting carefully is vital when buying a property overseas, both when making the initial purchase and when looking after the upkeep and maintenance. You will need to establish a clear, realistic budget between you and your friends that includes all relevant expenses, from the deposit and the mortgage payments to taxes and insurance.
Legal Agreements
However close you are to your friends, it is essential that everything you do is formalized and legally binding. It is sensible to draw up an agreement on what each party’s responsibilities are, what the ownership percentages are, and what the process is if one or more people want to sell their share.
Maintenance and Upkeep
It is important to decide how upkeep and maintenance will be carried out. You might want to divide up essential tasks between you or hire a property management company to take care of it for you.
Scheduling and Usage
Fair Scheduling
You will want to agree as a group on how you will allocate the available time at the vacation home. The complexity of this will depend on how long the peak season lasts at your chosen destination, as if the most popular time to visit is short then everyone will be fighting over it! It is vital to create a fair scheduling system that has agreements in place if there are conflicts.
Guest Policies
It is also important to implement clear rules on hosting guests, and deciding what to do about friends and family visits (and the associated costs).
House Rules
Setting house rules is also important, particularly when it comes to things like pets, smoking, and any other potential issues. Clear, upfront guidelines help prevent misunderstandings and ensure that everyone enjoys their time.
Sharing the costs and responsibilities of a second home abroad is a great way of making the dream of vacation home ownership into a reality. With careful planning and a few key guidelines, it is a wonderful way of enjoying all the benefits of a vacation home without taking on an unmanageable burden.