Pros and cons of buying a holiday home with friends
Do you dream about buying a holiday home abroad in France or Spain? If owning a piece of paradise is on your bucket list, perhaps you’ve considered sharing the cost with friends. But is it ever a good idea to enter into a financial arrangement like this when personal relationships are involved? We’ve been exploring the pros and cons of buying a holiday home together.
The Pros of buying a holiday home
Pro: Sharing the cost
The downpayment on a holiday house is a stumbling block for many potential buyers, so sharing this upfront cost with somebody else can serve to remove the barrier to entry for many. Spreading this cost over two or even several families and then applying for a joint mortgage could also mean you could afford a bigger and more luxurious property than if you were going it alone.
Pro: Sharing responsibility
If you’re equal partners in the ownership of a holiday home, you can share responsibility for the maintenance of the property. When problems arise – a leaky roof or the retiling of a bathroom – they’re less of a burden when shared between friends.
Pro: Greater occupancy
Most people don’t have more than a few weeks of the year when they’re able to use their holiday home, so having multiple families means it’s occupied more often – ensuring that the house isn’t shut up for too long a period of time and any maintenance issues are picked up before they become problems.
The Cons of buying a holiday home
Con: You need to treat the partnership like a business arrangement, not a friendship
You wouldn’t have entered into a venture that requires this kind of commitment if you weren’t good friends with plenty in common. But the fact is that, for everybody’s sake, you can’t treat this partnership like a friendship – it needs to be formalised like any business arrangement. This can feel uncomfortable when you’re personally close to one another, and starting conversations about drawing up contracts and legal documents can feel awkward. But it must be done!
Con: Potential for disputes
As friends and their families buy a holiday home together, there is always the potential for disagreement. One party may be happy to let the house out as a holiday rental while the other prefers not to; one family may feel they’re taking on the lion’s share of the maintenance or you may disagree about who gets usage of the property at which times. In fact, you might find you didn’t know each other as well as you thought you did!
Con: You’ll need to take their holiday plans into consideration
Before booking your travel to your holiday home, you’d need to take into consideration not only your own family’s vacation days and school holidays, but those of your friends as well. Who gets Christmas? Who can go at Easter? And the summer holidays? If the house isn’t big enough for you all to use at once, periods of use will need to be carefully agreed upon ahead of time.
Con: You might not always be in the same financial position
When you enter into the agreement, it’s likely you’re in a similar financial position, with similar expectations and resources. But what about as the years go by? Will one partner want to renovate and the other feel it’s not financially within their reach? Will one partner run into difficulty and need to sell their share? The only thing we know for sure in life is that it’s impossible to predict what’s around the corner, and entering into a financial arrangement with a friend essentially ties you to their financial future, and them to yours.
The Solution to buying a holiday home
Co-Ownership through Lazazu
As we see it, there seem to be drawbacks when it comes to buying a holiday home with friends. That’s why at Lazazu we want to give you all the benefits of co-owning the second home of your dreams with none of the downside by making the co-ownership process simple and accessible, even with strangers. We help you find and secure your dream home with co-owners hand picked by us, serving as your sole point of contact throughout the legal process and beyond. And then we ensure that the home is fully managed as a company (e.g. an LLC), that all maintenance costs are shared in proportion to your ownership, and that your access to the home is smooth and hassle-free. As we see it: all of the pros and none of the cons.
Discover more about Lazazu:
How Lazazu co-ownership works | Frequently asked questions about shared holiday homes | The benefits of fractional ownership | Browse Lazazu’s selection of second homes | The difference between timeshare and co-ownership