Author Topic: Gathering a group of people to co-own property?  (Read 1260 times)

Mr. Green

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Gathering a group of people to co-own property?
« on: May 22, 2019, 02:27:03 PM »
I read Tynan's blog (tynan.com), an interesting, entrepreneurial fellow who has done many things in his life that run against the grain of societal norms. He's a big proponent of the sharing economy and one of the things he's done is purchase multiple properties around the world with a group of friends. Each property might be owned by a slightly different group of people but the idea is that 6-10 people can buy something at a much smaller cost to each member and in return you have the ability to own property in different places you enjoy. As a FIREe who is getting into more travelling this idea really appeals to me. If I could own a piece of property for $10,000-30,000 and have a system where everyone has the ability to use it together or separately, it's a great way to have access to different places around the world. Is anyone here involved in anything like this or know of any place on the internet where people have gathered to pursue something like this?
« Last Edit: May 22, 2019, 02:29:26 PM by Mr. Green »

walkwalkwalk

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Re: Gathering a group of people to co-own property?
« Reply #1 on: May 22, 2019, 02:59:28 PM »
Is the idea that some of the time it would be rented out to non-members? So it would kind of be like a time share, but smaller scale? If so, I wouldn't see how this is any better or worse than a time share.

Mr. Green

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Re: Gathering a group of people to co-own property?
« Reply #2 on: May 22, 2019, 04:21:27 PM »
Not rented, just privately owned by a small group of people. Gives everyone ample opportunity to enjoy it without the cost burden of single ownership.

Cassie

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Re: Gathering a group of people to co-own property?
« Reply #3 on: May 22, 2019, 04:43:45 PM »
It limits you to visiting the same places which would get boring.

Telecaster

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Re: Gathering a group of people to co-own property?
« Reply #4 on: May 22, 2019, 04:52:36 PM »
I see a number of potential problems.  There are issues like maintenance, utilities, and furnishings, and agreements about the share of how those things are paid for.  And of course, how do people exit the arrangement when they choose/need to do so, and what happens if one of the group decides to not pay the agreed upon share. 

For reasons like those, this type of arrangement doesn't sound attractive to me. 

Freedomin5

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Re: Gathering a group of people to co-own property?
« Reply #5 on: May 22, 2019, 04:58:51 PM »
How is this cheaper than AirBnB?

I do this now with a cottage in Canada. I co-own it with three other family members. We formed a holding company that actually owns it and then we each loan an amount into the company. It gets very messy very quickly because different people sometimes contribute different amounts. Different people have different levels of involvement in caring for the property so feel like they should be paid for their services or get a discount. Splitting rental income (if you rent out the place when no one is using it) is tricky ó for example, if I canít use my weeks and decide to rent out the space, do others get to share the income generated by my weeks? That doesnít seem fair. But we do share income generated by unassigned weeks.

Financially, it is not cheaper and does not make as much money as if I just put the initial amount into an index fund. It makes more financial sense to put everything in an index fund and then rent an AirBnB.

So why did I do it? Not to make money. Thatís for sure. It was for emotional reasons. We love that lake and the resort amenities. Apparently, so does everyone else because AirBnBs are always fully booked way in advance for the summers. We want to go back each year to the same house. We want to be able to invite our friends up whenever. We have friends in neighboring cottages. Itís our family cottage where we reunite each year. Itís a home base for us since we work abroad. It represents stability. And itís the best way to have our own house in an HCOL area without paying the full cost of owning an actual house.

GrayGhost

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Re: Gathering a group of people to co-own property?
« Reply #6 on: May 22, 2019, 06:01:27 PM »
I see a number of potential problems.  There are issues like maintenance, utilities, and furnishings, and agreements about the share of how those things are paid for.  And of course, how do people exit the arrangement when they choose/need to do so, and what happens if one of the group decides to not pay the agreed upon share. 

For reasons like those, this type of arrangement doesn't sound attractive to me.

Right, it's one of those things that works out great, until there's a major problem... what happens if there's a dispute of some sort, or someone's financial situation changes, etc etc. At that point you'll need formal documents for a business setup, the complexity increases, and the headache increases.

I'm not saying that it can't work, but it's sort of like a marriage in a way... you ought not do it unless you're damn sure of the other person (or people, in this case) and you can trust them to act honorably and not against your interests, even if things turn south for them personally.

Mr. Green

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Re: Gathering a group of people to co-own property?
« Reply #7 on: May 22, 2019, 07:15:45 PM »
No doubt there are definitely logistics to manage with a setup like this. I'd probably be looking at cash buys so you're not dealing with a mortgage. Then it's just kicking in additional funding periodically for taxes and maintenance. It goes without saying that this means you're returning to the same place but there are numerous places in the US that I'd have no problem frequently returning to. For instance, as an East Coast resident, I'd love to have a property on the Pacific Northwest that could be a home base while we're traveling that area. We've been on the road for the last two months of car camping and the wear of constantly moving is becoming evident. Having a home base for travel would be great, and that's not really something an AirBnB can work for. That's just one example.

GreenEggs

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Re: Gathering a group of people to co-own property?
« Reply #8 on: May 22, 2019, 08:01:43 PM »
No doubt there are definitely logistics to manage with a setup like this. I'd probably be looking at cash buys so you're not dealing with a mortgage. Then it's just kicking in additional funding periodically for taxes and maintenance. It goes without saying that this means you're returning to the same place but there are numerous places in the US that I'd have no problem frequently returning to. For instance, as an East Coast resident, I'd love to have a property on the Pacific Northwest that could be a home base while we're traveling that area. We've been on the road for the last two months of car camping and the wear of constantly moving is becoming evident. Having a home base for travel would be great, and that's not really something an AirBnB can work for. That's just one example.




I think you're looking for "short term rentals".  Maybe a month or three.  House swapping might work.


The idea of shared ownership seems too complicated to me. 


I live up near Boone, and see you're in Wilmington.  Both are tourist destinations that should be easy to find interested people to trade with.   




Telecaster

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Re: Gathering a group of people to co-own property?
« Reply #9 on: May 23, 2019, 11:56:41 AM »
No doubt there are definitely logistics to manage with a setup like this. I'd probably be looking at cash buys so you're not dealing with a mortgage. Then it's just kicking in additional funding periodically for taxes and maintenance. It goes without saying that this means you're returning to the same place but there are numerous places in the US that I'd have no problem frequently returning to. For instance, as an East Coast resident, I'd love to have a property on the Pacific Northwest that could be a home base while we're traveling that area. We've been on the road for the last two months of car camping and the wear of constantly moving is becoming evident. Having a home base for travel would be great, and that's not really something an AirBnB can work for. That's just one example.

My father and his siblings bought a place in Jackson, WY some years ago which has worked out very well.   It is managed as a vacation rental that the family gets to use.  So what you are talking about is possible, but can be a complicated thing if everyone doesn't see eye to eye.   

I've been toying with the idea of buying a place and remotely managing it as AirBnB (yes, I realize I need a local person as well) for reasons like the ones you mentioned.  I have't quite sorted though all the details, the main one being if it is a good idea or not  :)

lhamo

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Re: Gathering a group of people to co-own property?
« Reply #10 on: May 24, 2019, 02:43:08 PM »
Have you looked at house swapping at all?  If you live in a part of the country others want to visit, it should be pretty easy to find someone to swap with.  Once I have more autonomy over my own living space/vacation destinations, that is probably what I am going to do. Maybe with friends I meet on various internet fora....

SwordGuy

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Re: Gathering a group of people to co-own property?
« Reply #11 on: May 24, 2019, 07:52:26 PM »
Tynan is a very good writer.

He may even have an awesome group of responsible friends, some of whom may be just one spouse or financial reversal away from being way worse than no-longer-awesome.  So no, this would be a non-starter for me.

Plus, I wouldn't by vacation property unless I loved that area enough to go back to it over and over instead of someplace new.

I can rent an awful lot of hotel rooms for $10,000 to $30,000...

waltworks

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Re: Gathering a group of people to co-own property?
« Reply #12 on: May 24, 2019, 08:54:33 PM »
Buying vacation homes is almost always a stupid financial decision, and that's leaving out the catastrophic downsides of owning property with a bunch of other people.

So personally, I wouldn't even consider it. You can travel like crazy and stay in new places as much as you want and spend less money than you will on maintenance and taxes and lawyers when things go south.

If everyone involved was family, then *maybe* I'd consider it.

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pmac

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Re: Gathering a group of people to co-own property?
« Reply #13 on: May 25, 2019, 10:32:30 AM »
Judging by the low quality of kitchen items in so many AirBnB's I've stayed in, I would not go forward with this idea.

Your idea of acceptable is somebody else's idea of "luxury".

Plus, you're at the mercy of the cheapest cheapskate in the group. "Let's hire Bob to clean the place! He's only $7 an hour! **Bob cleans with 20 year old vacuum and happens to also be a chainsmoker.


Have you ever had college roommates who buy the cheapest toilet paper they can? This is what I'm envisioning with your group owned vacation houses.