A friend of mine told me about her parents' vacation rental arrangement, and this setup really appeals to me.
It's basically a time share arrangement among close friends & family. As I understand it, one person owns this house in Mexico Beach, FL, but the eight couples split the time evenly. They have a rotation so that every eight weeks, each family gets a turn staying Monday through Monday. They can either do the cleaning themselves before 4pm on their check-out Monday or make arrangements to book and pay their shared cleaning lady. Each family has a tote of personal belongings that stays on site so they're each using their own linens, laundry detergent, toiletries, etc. without hauling everything back and forth. Within reason they leave some items in the pantry and fridge because they all know each other and are comfortable doing so (as a matter of fact, at least three of the "owners" are siblings). They also seem to all be pretty invested in keeping the place up and pitching in time and effort toward maintenance, repairs, furniture replacement, etc.
I suppose those details are probably covered in their lease agreement, but my friend's dad is forever finishing a piece of furniture, replacing a TV, or something of the like. They've allowed us to use their remaining days three or four times because they typically only stay until Thursday and then let their daughter handle the cleaning, changing linens, etc. and I've gone with her. It's a very cozy, comfortable house -- nothing really fancy, but it's across the street from the beach and is really well equipped for a comfortable stay.
I find this model much more appealing than allowing total strangers to stay in my vacation rental. Does anyone have experience or advice for this model? Our family would like to purchase a riverfront property in North Georgia as a second (vacation) home but can't afford to do so without making it into a rental property. However, I've seen a lot of AirBnB horror stories lately and really don't want to go that route. I'd love to set up an arrangement of rotating time with the same trusted families constantly to help cover the operating expenses. If anyone does this, I'd love to hear your tips about the contract, logistics, finding other families to go in with, etc.
@Kristin McPherson So in that case its not really an investment but rather truly your vacation home that you are simply sharing the cost with others. I think the arrangement that you have described is an extremely unique situation. Any time that many folks as in friends and family, go in together on something of that magnitude - siblings or not - there are usually issues that arise at some point. I have seen it ruin friendships and cause hardships in the family. If you do something like that you better make sure are on really good terms and spell out all the details in a contract. And also realize if you are using family in this arrangement, you might have some in the family that would take offense to putting things down in a contract and think the family bond is strong enough to keep it together. I have not done this type of thing, just relaying what I have seen over the years. I would not advise. I think there would be much less headache just buying it yourself and putting it up on VRBO and Airbnb when you are not using it. That's what most of us do here. Get a good cleaning lady, a good handyman, and you are good to go.
I think your friend is extremely lucky to have 7 other couples who pay their share of repairs and expenses, and treat the arrangement with respect. Things to think about: what happens if one or more couples don’t pay for repairs and expenses or leave the place a mess? Can you force them out? What if a couple finds they don’t want the arrangement anymore and want to sell their interest? Do only you have the right to pick the next couple? Your friend let you stay at her place, can your couples allow anyone to use or rent their week from them too? Then you’re back to strangers staying there. Take a look at timeshares and interval ownership units and look at the monthly maintenance fees. Most people today do not want to repair furniture, replace TVs, etc on their vacation, so you’ll probably have to budget in for stuff like that. I think the success of your friend’s beach house will be hard to duplicate.
This sounds like a shared vacation home, not a business. I wish I had 7 couples I trusted to do something like this though. It sounds awesome.
That's correct that it's a shared vacation home (to offset our costs) more than an investment. I just thought I might be able to still get some good advice here. I've also posted the same inquiry in a couple of Facebook groups.
Yeah, my friend's parents are an older couple, and their shared arrangement is with siblings and other folks their age, so perhaps the model doesn't appeal as much to people in my generation. But I've found their place to be extremely comfortable and homey, and there is a huge appeal to me to have families with similar values staying in my home. We are a large Christian homeschooling pastor's family, so our parties look a little different. LOL
I have a list going in a Google doc of all the ideas I've thought of so far to include in the lease agreement, but you can take it to the bank that I FOR SURE would have a detailed contract drawn up by a RE attorney. I'm trying to dot all my i's and cross my t's, so hopefully there's someone around here who has some first-hand experience with this type of arrangement.