Friday, February 10, 2006Looking for that vacation home? Maybe a group is better to help you buyDid you ever think of owning that place in the Vail Valley? Steamboats, Breck? The thought of having one is far more romantic than payng for it. But you could consider buying it with a group. Buying with friends and family is a good idea right up to the time that things go bad, so if you decide to go this way, protect the others and yourself from each other. This is much easier to do when you ae friends than after things have gone bad. Create an Agreement Document One way to get this done is to get it all on paper. Easiest if everyone is an equal owner, harder if you have shares but then even more necessary. You mus specify Dates each owner has primary use of the property Shared costs for each owner whether they use it or not (Mortgage, insurance, furniture) Shared costs on usage (cleaning service, utilities, etc) Responsibilities you may share such as improvements, opening or closing it for the season (if it is a seasonal usage type property). It is easier to set exclusive rights for specific times, or pay for the time uses. Because a ski resort may be more desirable on the Holiday weeks, you may want to assign a value to different months through the year. Someone getting Xma and New Years week may give up all of July to another owner to even it out. How often you get to use the house may be gauged by how much money you put in. Be precise in you agreement You can pay a few thousand dollars for an ownership agreement. Or you can do it yourself. Sometimes a lawyer as a third party can be useful to level the playing field, and no personal issues can easily arise. You should take into account a monthly amount for repairs, maintenance in the like even if you don't need it now. You can hold that money, similar to an escrow account for taxes and insurance but for costs that are a sa much choice as necessity. You also want to decide how you move forward on an expense, such as new furniture or retiling the bathroom. Onc esimple rule is set an amount that has to be approved. For example, someone replaces a poted plant that was blown over by the wind for $25, they can make that decision and use the maintenance account. But an appliance over $200 may need approval by vote from everyone. Not having these specifics can really strain the relationships between owners. Think of every decision that might need to be made, and plan how you will do that on paper. It will make everything much smoother throught the tenure of your ownership. Don't forget stipulatons about pets. Renting Are you going to recoup some of the cost by renting shor term to vacationers? You'll need to decide to rent or not. Only 14% of vacation-home buyers rent their second or vacton home according to the National Association of Realtors. If you are renting, you will want to find furniture that makes sense for clients as well as yourself, and you may want to consider not having anything of your own on the property, unless you ahve a locked off closet or room that is "Owner Only" access. Check out all the sites for renting to see what a property might expect to bring in. Some places to look: VRBO.com rentalo.com cyberrentals.com rsvacation.com gotyourspot.com There are dozens more that are good and hundreds more that are probably not as effective. Know your makret if you are going to rent. make sure it is worth it. There are risks having strangers in your home. There are also tax consequences to renting you should follow. Co-owners who rent out their property often form a limited liability company to protect themselves in case of a lawsuit. You can set up an LLC or make a similar arrangement with a lawyer when you draft an ownership agreement. In addition to homeowners insurance for your vacation home, you might also want an umbrella policy to supplement your liability coverage. Exit strategy You or your partners may want to get out of the property for many reasons Reasons such as wanting a larger place, a different locale, a catastrophic event such as a death or divorce are just some of the reasons. Make sure you decide what happens in the case of death of one of the owners. A last will and testament should define exactly what happens to the ownership of the party in question. A buyout provision forl owners who want to leave is necessary, and if not defined , will seriously hamper how much they deserve to be bought out. You can create it with a term limit, so you can review it every few years ot see if it still fits . Dykes's group, for example, plans to review their agreement every five years. They also have a buyout arrangement under which a partner who wants out and those who stay would get separate home appraisals. The remaining investors would pay the partner who leaves in cash, based on an average of the appraisals.your goals Without a buyout agreement, you can sue for partition, forcing the property to be sold and the profits divided among the partners. Partition orders usually set a price if partners want to buy out a disgruntled colleague. But partition lawsuits are expensive and rare. It's less costly and more profitable for partners to decide among themselves when and at what price they want to sell their property. Rather than settle the matter in court, it's generally better for the parties to split the difference between disputed buyout offers or to come up with a figure based on separate appraisals. posted @ 01:53 PM MST [link] [Karma: 4 (+/-)] [No Comments ] Sunday, February 5, 2006I need a place to live. Does anyone have $20MM to lend me?It happened. A home went up for sale in Denver for an unprecedented $20 million this week, the most expensive home ever in the Denver market. The House stats: *23,000 square foot *Cherry Hills Village *3 acres *9 bedrooms *7 bathrooms The basement is a mere 5,300 square foot, but at least it is fully finished Did we mention the 9 fireplaces! Gene Schneider who reportedly made his money as a Cable Cowboy owns the home. Plan on paying over $100,000/month if you put down 20% ((a cool $4 million). Taxes run about $83,000 The HOA is a bargain at $745 per month. posted @ 03:16 PM MST [link] [Karma: 0 (+/-)] [No Comments ] |
Simply the best real estate search engine:Sponsored Links:Barton Real Estate Blog Links:WeblogArchives Log ArchivesApril 2006March 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 null 20 Entries04/03/2006: Staging a Home03/11/2006: How Much are Closing Costs 02/10/2006: Looking for that vacation home? Maybe a group is better to help you buy 02/05/2006: I need a place to live. Does anyone have $20MM to lend me? 01/31/2006: National Foreclosures Up in 2005 01/27/2006: Denver Skyline gets a new addition 01/23/2006: Mile High Bankruptcies and Foreclosures 12/28/2005: Housing-bubble shield 12/28/2005: Used home sales reach record $14.9 billion 12/27/2005: Higher end houses inflation proof? 12/27/2005: Colorado Real Estate Bubble a myth? 12/19/2005: Real Estate Season is Almost Open 12/02/2005: Good time to invest in a rental property? 12/02/2005: Someone ran over my dogma with karma 11/28/2005: Home sales off from last November 11/28/2005: Mile High homes 11/28/2005: Homeowners look to refinancing mortgages 11/28/2005: Number of homes sold down, prices up 11/21/2005: Sales of new homes flat 11/17/2005: OPINION - Javad Heydary 11/16/2005: Home price growth lags 11/16/2005: The world’s worst mortgage 11/10/2005: Congress should ax public land giveaway 11/07/2005: Realtors up in arms about mortgage tax break change 11/07/2005: Bush considers abolishing mortgage tax break! Not good for owners. 11/02/2005: Woman sells house with added bonus... a wife! 10/24/2005: Just some news on the Denver Real Estate front - priced below market? 10/11/2005: Denver or the mountains, a good investment in Colorado 10/10/2005: 09/15/2005: FEMA starts to allow groups in to start rescuing animals 09/01/2005: Would you bet on Median Home prices 08/30/2005: RE/MAX plans to post all U.S. listings online 08/29/2005: Denver Real Estate Market News 08/26/2005: Denver Median Home Price Sets Record 08/25/2005: Denver Real Estate //20:
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