Money Property What to consider when buying a holiday house with a friend
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What to consider when buying a holiday house with a friend

buying a holiday house with a friend.
It sounds idyllic, but you need to consider many things if buying a weekender with a friend. Photo: AAP
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Amanda Hembree casually raised the topic over martinis 11 years ago.

“What about buying a weekend house together?” she asked Marla D’Urso, a close friend.

The two women, who lived in Manhattan, had travelled together frequently and very amiably, and were always looking for places to go on weekends.

It was 2008, the stockmarket had recently crashed, with home prices tanking in tandem, so there were bargains to be had.

And at the time, neither woman was in a relationship.

“So we thought, ‘What are we waiting for? We don’t need to have our own families to do this’,” said Ms D’Urso, who is now 50 and the real estate manager for a family business.

For the past decade, she and Ms Hembree, 52, a speech language pathologist, have jointly owned a Cape Cod-style house on 2.43 hectares in West Stockbridge, Massachusetts, for which they paid $US380,000 ($550,000).

Ms D’Urso oversees matters pertaining to décor; Ms Hembree handles administrative details.

They each make monthly contributions of $US700 ($1010) to a Berkshires bank account to cover maintenance costs, and sometimes there are special assessments to, say, repair a leak in the roof or buy a new water pump.

Oktoberfest, spearheaded by Ms D’Urso, draws weekend guests to come choose pumpkins.

Ms Hembree’s July 6 birthday is part of the Fourth of July celebration at the house.

What they grandly and waggishly refer to as the home owners’ association annual meeting convenes in the spring; it basically involves cleaning out the garage. Boyfriends have come and gone, and Ms D’Urso got married last year, but no one has come between the women and their home away from home.

“When we were looking, my mother said, ‘You’re crazy. You don’t go into business with a friend; you’ll end up fighting’,” Ms D’Urso recalled.

“And she was so wrong. It’s been pretty smooth sailing.”

So much so that Ms D’Urso’s brother Gary was inspired to team up with his wife, Marina Brolin, and their friend Julia Jones to buy property in Cold Spring, New York.

There is an understandable appeal to buying a weekend or vacation house with friends (or family members).

On a practical level, co-owning may be the only feasible path to ownership. And even those who theoretically could go it alone may quickly discover that two chequebooks are better than one.

More buying power means more square footage, more acreage and more amenities (pool, tennis court, spa).

The arrangement is also a great way to reduce shame and anxiety when owners decide they would rather hunker down for the weekend at their primary residence than load up the car and fight traffic.

“We know people who buy a weekend home and feel guilty over the fact that they don’t use it enough,” said Gary D’Urso, 57, who is in the real estate business.

“It makes more sense when you only have a share of the house.”

And how nice to have someone who will shoulder half the costs of pool cleaning, grass-cutting and snow removal, share the hosting responsibilities at the annual Labor Day barbecue and take on the job of telling off difficult neighbours.

“It’s a Golden Girls phenomenon,” said Jessica Lautz, the vice president of demographics and behavioural insights at the National Association of Realtors, a trade group.

“Marriage rates in the US have dropped drastically, but people still want home ownership, be it primary or vacation houses. However, affordability is out of reach for many individual Americans, so partnering up with a friend becomes an ideal solution.”

Well, not always ideal. And not always a solution.

“Home ownership is so emotional, and it’s not easy even when you’re sharing the house with your romantic partner,” said Diane Saatchi, an associate broker at Saunders & Associates, a real estate agency in the Hamptons (on Long Island, New York).

“I suspect that some friends who buy together think it’s a good idea because they really like the idea of having someone at the house for company or they think they won’t be at the house much, so it won’t be a problem,” continued Ms Saatchi, who worked with two women in their 40s who were buying a weekend home at Montauk, New York.

“They were both strong and opinionated and sort of cranky, and neither had lived with anyone for a long time,” she said.

“They didn’t agree on paint colours for the house. They didn’t agree about whether they should rent the house out to help cover their costs. They knew they had to have a pool for resale purposes, but they couldn’t agree on what kind to have and where to put it. I could see it was going to go sideways very quickly.”

Five years on, the two women have finally agreed on one thing: Selling the house. “But they can’t agree on a price,” Ms Saatchi said.

“When friends buy together, it’s a risky thing,” said Edward Burke, a lawyer in Southampton Village. “They come to my office, they’re excited and they have stars in their eyes: They’re going to be partners.”

Mr Burke usually offers a reality check: “We always tell them to have an exit strategy in case things don’t work out.”

Six things to do before buying a house with a friend

Once you’ve decided to buy and share a vacation home with a friend or family member, there are a few steps to take to make sure things go smoothly.

  • Create a limited liability company that will buy the property. This will help protect your other assets if something goes wrong
  • Be upfront about your finances and your credit scores. The lowest credit score will determine the mortgage rate – and whether you can get a mortgage
  • Create an operating agreement, listing monthly and annual expenses, including property taxes, insurance, utility bills and maintenance costs (landscaping, pool cleaning, snow removal)
  • Come up with a plan to cover the cost of incidental and unexpected expenses like a new roof
  • Set guidelines for access to the property. Do you plan to be there at the same time? Will the property be rented to offset your costs, and if so, how often?
  • Plan for the future. Consider what would happen if one of you wanted to sell.

-The New York Times

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