Should we buy a vacation home with relatives?

[OkeeDon]

Given that there would be a management company, it could work something like this:

You all buy the property strictly as an investment and hire a competent management company to handle the rentals. I'll make a couple of assumptions about the management company -- they handle the bookings, inspect the property, provide someone local to clean between rentals, and handle repairs. If the investment is a good one, you all should end up making a little $$ out of the deal, with no problems, providing you all agree to let the management company make decisions. Of course, you also need some buyout provisions in the case of one or another of the couples needing to get out.

When it comes time for personal use of the cabin, each couple goes through the management company and books it like a tenant, not an owner, and pays the full rate. Of course, each gets back 1/4 of the profit from their own rental, making it a little cheaper because of the investment. That way, no one else gets hurt if they don't get a chance to use it in a given year.

To add a little bit of fun into the deal, you might block out a week in the beginning and/or the end of the season where it is for everyone to enjoy at once as a combination family week/maintenance week to open and/or close it for the season, with the provision that no one has to participate in any work, it's more just for fun.

Doing it that way, you easily stay within the IRS guidelines for personal use of a second home, and all of you can write off the max on the inverstment.

 

[Robert_in_NY]

My reason for saying that is otherwise you risk making the wife mad since it is her family and you will basicly say you don't trust her family if you disagree with her wanting to join in. Which is worse, throwing money away or making your wife upset. You can make more money but getting the wife to forgive you is a lot harder then making money when you slight her family. It would be easier if both his family and hers were involved so he would not look like he distrust her family but either way, I would not do this deal and try to find some way to convince the wife why. But if all else fails, toss the money away and hope for the best.

 

[mountain_man]

OkeeDon - All excellent suggestions.

Here in ski country USA, it's the management companies that are really making the money (along with their cleaning-maintenance-repair personnel - it's incestuous), so suggest looking carefully at what they charge for services being provided.

 

[pruntyc]

Of course the other thing to look at, besides maybe throwing some money away. Is the way it could work out you might end up also throwing you marriage away, it has happened over things like this. If you find away to make the wife see that it is a bad thing to get into, you can probably keep her. She would get over it. But if it comes into a family fight, she may not get over it. I kind of see you as a outsider in this deal. It's not that you don't trust her family, it's just one sided, when they are all hers. Facts of life, don't put your self into a problem if it can be avoided.

 

[pruntyc]

I should reword that, I said I kind of see you as an outsider in the deal. Well, you wouldn't be alone, your wifes sisters, husbands would also be. If there comes trouble and with that may people involved, you three would be the ones that would get hurt the most. Family would still be family, you know Mom, Dad, and their children would still be standing, but would you three? I know it sounds like that couldn't happen, you are probably all close, but as I said things sometimes change, I've seen it happen.

 

[Bird]

Jerry, obviously those kind of deals work for some people, but I'm like most of the other guys: NO WAY would I be involved in something like that. /forums/images/graemlins/wink.gif /forums/images/graemlins/grin.gif They might buy it and me rent it sometimes, or me buy it and them rent it sometimes, but that would be the only way.

 

[Hoosier_Daddy]

Good luck if you do but I wouldn't..........

 

[Robert_in_NY]

By all means avoid the situation if possible, but when I said throw the money away if you can not convince her, I meant it. Literally do not worry any more about the deal. Mark the money gone and just forget it happened. Do not make hard feelings with the wife or her family but let the wife deal with it if she wants as if she wants to fight with her family then you support her. If she doesn't and decides it best to back away then support her. This is only if she doesn't agree to it being a bad deal ahead of time. If you can avoid it then avoid it. Of course there is the other option. Tell the wife no and when she lets you back in the house a year later be happy /forums/images/graemlins/blush.gif

 

[MossRoad]

<font color="blue">The wife and I
The wife's older sister and husband
The wife's younger sister and husband
My father-in-law and Mother-in-law
</font>

Three sisters and mom in the cottage...
Dad's on mom's side because...
Three brothers in law on the dock...

You guys are seriously outnumbered. /forums/images/graemlins/grin.gif

Going from my personal experience, I would not go into business with my family or my wife's family. I love them all dearly, but we do not see eye to eye on religion, finances or politics, so how could we be business partners? Your situation might be different. As others have stated, get it all documented by a lawyer. Good luck in your decision.

 

[Mrwurm]

Interesting comments from all. I'm going to have the wife read all these responses. It was actually her idea to post it here for review and approval. (disapproval)

My wife was initially quite excited about the deal, but she has come up with some concerns of her own.