Buying a family beach house

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  Quantumcat on 14/02/2018 - 10:23

  +1

  Great idea, I was thinking of doing the same thing. You would have to think of all eventualities and how to handle them so you don't get surprises down the road. Eg what happens if someone wants to quit. Would the remaining family members buy out their share, and how would you calculate how much to give them? Buying outright by redrawing on your mortgages makes this easier. You could make it that the person wanting to quit has to pay to get a valuation done, and they are paid out a fifth times the percentage appreciation in the time they have been a part of it. And then the others would need to make a further redraw on their own mortgage to pay the people leaving so they'd have to agree that could happen in the future (no borrowing up to max capacity just in case). And then how do you handle it when they want to come to family events at the house? I would say you then charge them say $100 a night times the appreciation percentage. And maybe you would also like to put it on air bnb, and any money made from that can go into an offset account and be used for regular maintenance. Anyway good luck if you decide to do it!!

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  mskeggs on 14/02/2018 - 10:55

  +9

  $20,000p.a. for the IO loan buys plenty of weeks at somebody else's beach house, who can also pay the upkeep, rates etc. And you can go wherever you feel like, not the same place each year.
  If you are willing to rent it out the 6 weeks of summer holidays, you would likely cover more than half the costs, but then why have a beach house if you can't use it at the best time?

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  GG57 on 14/02/2018 - 12:42

  It sounds an ok concept, but can get messy as Quantumcat describes (and that is just the finance side of things).

  Despite the best of intentions there will always be conflicts around who is using the holiday house at specific times etc. (unless the house will be big enough for all of you).
  Even then, what if you want to take some friends there?
  And families have a habit of falling out about something; how is that dealt with?

  • 

    Quantumcat on 14/02/2018 - 23:47

    I was thinking each party gets a number of nights each year for exclusive use (say, 30 each) that must be booked a fortnight at least in advance. All other times you don't mind if other family joins you.

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  Halo375 on 14/02/2018 - 12:58

  +1

  As others have mentioned, managing the use of the property would probably be the biggest issue if everyone contributes equal funds. Whatever you do - make sure you have a signed agreement from all parties that explains ownership, cost sharing, usage, repairs and sale of their share. If you plan this really well then I'm sure it will be fine.

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  JuryWheel on 15/02/2018 - 13:39

  Thanks for all the responds guys - i appreciate the negativity that people have concerning changed circumstances, divorce etc, but sometimes you have to take risks/back your relationships in and obviously have some written down agreements in place to safeguard much of this.
  We had initially wanted to go a mortgage route so we only needed $10-20k deposit each, but can understand the ease of just buying it with cash. Will have to look at whether this is possible due to needed probably $60-100k each for this.
  I can also understand some peoples reasons of guying the airbnb route instead - but the attraction, as some have mentioned, of having a place you can pop down to on a whim for 1-2 nights or a week, that has bedding, towels etc ready to go is appealing. We all have young kids so even having somewhere with toys, sport equipment ready to go, would be nice.
  This is all without mentioning the potential growth in value as an investment over the long term and the possibility of making some money renting it out too (not sure how this affects things though..)
  Thanks for all the comments, happy to continue to receive suggestions, especially from people who have something similar in their family.
  Cheers