And when the property is not in use, you could have it rented to cover the running costs or earn an extra income. Sites like Airbnb and Stayz make the short-term rental of holiday property a feasible prospect.
It sounds like a win-win situation. Nothing could go wrong, right?
According to many real estate agents who’ve been professionally involved in such acquisitions, squabbles and tensions sometimes erupt among co-owners. And if your co-owner happens to be a relative or friend, the fallout could be irreparable.
According to Brett Hunter, director of Raine & Horne Coastal on the NSW central coast, squabbles among co-owners sometimes erupt because of diverging priorities.
He recently recounted a story to the Australian Financial Review about a co-owned townhouse in Avoca that was managed by his firm. The co-owners squabbled because one party wanted to have the townhouse rented out regularly for income, while the other wanted to use it as a holiday home.
The place couldn’t be rented out to paying guests regularly because the other co-owner was always there. Eventually, a major argument erupted and both parties decided to exit the ownership.
Aside from conflicting priorities, tensions can also result from housekeeping, maintenance, and sharing issues. One party might complain that they’re always cleaning up after the others, or that the property is always a mess.
“[One thing] that's good is to have a professional cleaner,” Hunter said. “People say: ‘We’ll save some money, we'll clean it ourselves for the next guest', [but] everybody's level of cleanliness is different. You don't feel bad calling a cleaner back, but you will feel bad calling your friend and saying ‘Hey, you left the dishwasher full.’”
Ongoing maintenance costs should be outlined and shared fairly among the co-owners. A schedule should also be created that governs who gets to stay in the property and when.
Lastly, co-owners should have an exit strategy. Will the co-owners sell the property in the future, or will an ownership vehicle be set up that allows the property to pass on to heirs without stamp duty costs?
By maintaining open lines of communication and agreeing to ground rules, relationships won’t be strained and co-owners can enjoy the holiday property they’ve worked hard to buy.
Collections: Mortgage News