How To Share A Vacation Home – Jeff Lichtenstein – Wall Street Journal

June 30th, 2014

Summer Home

The following article appeared in the Wall Street Journal on June 16, 2014.

FIGURING OUT HOW TO SHARE A VACATION home is no day at the beach. But it may be the only way to have a day at the beach at all. That’s because the price of second homes is rising, and few people have enough cash to buy one on their own, let alone enough vacation time to justify the purchase. So increasingly they’re teaming up with friends or family to buy—or, in the case of inherited property, to keep—that much coveted retreat from the hassles of daily life. And, too often, straight into the hassles of shared ownership.

What could go wrong when sharing a vacation home with your dearest friends and family? Plenty, it turns out. The potential issues run the gamut—from how do you buy to how do you share time to how do you split costs to how do you sell.

“It’s like a marriage,” says Craig Gibson, a realestate attorney in Bridgehampton, N.Y. “There’s a 50% chance it’s not going to work.” (In case there’s any doubt how Mr. Gibson feels, he calls joint ownership in general “a recipe for disaster.”)

The Ground Rules

So, how can buyers reduce the likelihood of a disaster?

First off, experts say, consider the type of property carefully.

Kirk Booth, a broker in Asheville, N.C., counsels people looking to jointly buy a vacation place for the first time to start small. Try a planned community, where maintenance and the pool are part of the common charges, he urges, leaving fewer issues to complicate a relationship. Also decide how the property will be used. Will it be primarily a vacation spot for the owners to use, a place they can rent to others or some combination? It’s all too easy for people to approach a purchase with very different assumptions and figure everyone else is on board.

Ryan and Michele DeShazer, of Columbus, Ohio, had long talks with their co-buyers before purchasing vacation properties in Surfside Beach, S.C. The verdict: rentals, at least for now.

“We all agreed that we are not going to personally make a profit or use the houses as a vacation home for a while,” says Ms. DeShazer, who adds that she’s hopeful the two families can afford to begin vacationing in one of the homes some time soon.

Discussing, researching and agreeing in advance seems to have worked, she says. “We are all still happy and friends—so we are doing something right.”

Experts also say that it’s crucial that joint buyers spell everything out ahead of time. “You have to put together a checklist of all the things you need to agree on and all the things that could go wrong,” says Jeff Lichtenstein, a real-estate broker in Palm Beach Gardens, Fla. “Basically, you need a real-estate prenuptial.”

When it’s time to make the purchase, buyers also should think about how the deal will be made. Mr. Gibson recommends setting up a limited-liability corporation to make the purchase. This setup keeps the buyers’ personal finances separate from the property, he says, and the partners can set out
their rights and obligations in the company’s founding document.

Dropping Out

For one thing, what happens if a buyer can’t keep up with obligations? Anyone can suddenly become unable to meet joint payments on a home, says broker D. Patrick Lewis, in Scottsdale, Ariz. So, an exit plan should be a key part of any arrangement.

“It is necessary to have both blunt, exhaustive and sometimes uncomfortable discussions with all parties,” says Ms. DeShazer.

Chuck Bennett, a broker in Rancho Mirage, Calif., says partners should agree at the start how long to hold the property or how often to evaluate whether to keep or sell.

“One person almost always wants to back out, gets a divorce or loses money, so you just have to keep your agreement as ironclad as possible and set reasonable expectations about everything,” he says.

Mr. Booth, the broker in Asheville, suggests giving the remaining partners the right of first refusal if one wants to sell.

“It’s very important that everything be agreed up front,” he says. “I may not like who you are going to sell it to, and don’t want to be in a business with that person.”

Another big consideration that often gets overlooked—but should be settled in advance—is maintenance. Who’s responsible for keeping the place clean and in good repair? That can be especially tricky if the property is hundreds of miles away or more. One solution is to rotate the job so nobody has to do it full time.

For the past 12 years, Sabrena Tufts and her two sisters have been sharing a Martha’s Vineyard summer home they inherited from their mother. The sisters initially divided the responsibilities for the home into three buckets—financial, rental and operations—and rotate the responsibilities each year. That makes it more palatable to deal with repairs and contractors from a distance, such as last year when they had to raise the house and dig a foundation.

“Doing construction on an island far from where you live can be aggravating,” says Ms. Tufts. “But we were able to do it because we shared the chores.”

Another important financial step to take early on: setting up a shared bank account to cover maintenance and other expenses (and agreeing every partner will make regular payments). A separate account for the property draws a sharp line between personal and investment funds, and makes clear what’s going in and what’s going out, says Ms. DeShazer.

“We discuss all [deposits and withdrawals], no matter how large or small. You also have to determine what profits will be reinvested versus withdrawn for personal use. In addition, how you will pay for any large debt, if the money is not in the account?”

Setting Up a Schedule

Then, of course, there’s the matter of who gets to use the house when. This is an area that can be tough to set in stone ahead of time, because people’s needs change so often. One solution: a spreadsheet with time slots that rotate on a schedule or are assigned at random.

Rod Smith, a broker in Myrtle Beach, S.C., says a group of 13 couples came to him with what he thought was a near-perfect plan to share a beachfront condo. Each couple was assigned by lot four weeks a year, which could then be traded or sold to the other members as they wished. Mr. Smith had them add to their operating agreement one week a year during which the apartment was shut for cleaning and repairs by a professional maintenance firm.

Some owners, like Ms. Tufts and her sisters, meet when necessary to hash out schedules. Now that her siblings have children of their own, the three-bedroom house is too small for everyone to be there at once. Last year, the three sat down to replan how they share the house.

“We’re adapting the schedule to our lifestyles,” says Ms. Tufts. “It’s about having a system and mapping things out.”

The sisters with children have priority during school vacations, and if there isn’t enough space for everyone on a holiday weekend, the sisters are now in a position to rent a nearby cottage.

Barbara Reale, who shares a vacation home in Wall, N.J., near the Atlantic Ocean, with her sister and brother, says the siblings have worked out rules on when their children can be left alone in the house, and when they can use it with friends and without parents.

“That’s a source of potential friction,” she says, so it’s good to have an agreement in place.

Other parts of their dealings haven’t been working out quite so well, she says. Ms. Reale says she has set up a shared online calendar that all the owners can view and update, as many pros recommend.

“Nobody uses it but me,” she says. That has led to a few weekends where her siblings have shown up with extra people, making for a tight fit in the six-bedroom house they inherited from their mother, she says.

Her brother, Aldo Reale, says he never uses the spreadsheet, and just picks up the phone when he needs to coordinate. Her sister, Nancy Gifford Humphreys, says she never uses it either.

“I forgot about it,” she says with a laugh. “I never use it. I like to text or use more personal forms of communication.”

Houses held by the same family for generations can also present complex challenges, says Nancy Golden. Her great-grandfather, William Keeney Bixby, an early 20th-century industrialist, built the “Big House” on Lake George, N.Y., in 1902. Today, about 250 heirs share the mansion and a smaller house on the grounds. Because of the number of relatives involved, the family formed a corporation to oversee sharing the place. A treasurer tracks expenses and proposes an assessment each year. Each family branch appoints a booking agent to assign time slots, which are rotated annually. Slots can be sold or traded to other relatives. The corporation spends over $100,000 a year to maintain the houses, grounds, tennis courts, a boathouse and an 1890 electric launch. Ms. Golden, who has worked as a professional fundraiser, has been holding auctions each summer to raise an endowment for the property—selling everything from maple syrup made by a Bixby to time at a Bixby vacation home in Belize. She has raised more than $500,000 over the past 10 years, she says, with interest from the endowment spent on capital improvements.

“It’s endless,” Ms. Golden says. “They painted the north side last year, they’ll do the east side next year,” then the boathouse, the smaller house and start over again.

Mr. Green is a writer in New York. He can be reached at reports@wsj.com.

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547 Prestwick Circle | Prestwick Chase | PGA National

June 27th, 2014

Sitting on the 14th & 15th holes of the Bear Trap at PGA National, this townhome located at 547 Prestwick Circle in Prestwick Chase delivers the best views PGA National has to offer. Enter through the courtyard garden containing wonderfully lush landscaping to discover a home that has been beautifully remodeled with 20-inch marble-like porcelain flooring and upgraded with designer touches. The high ceilings create a great sense of openness, while the large sliders bring in a great amount of light. Tastefully remodeled kitchen with granite countertops, tumbled marble backsplash, stainless steel appliances, Craftsman maple cabinetry, and a wine cooler. Large sliding glass doors provide phenomenally wide-open views, making the great room truly great! The spacious master suite features a double-door entry, plantation shutters, walk-in closets, and the best views in PGA. The master bathroom has been gorgeously renovated with marble countertops, Craftsman maple cabinetry, rainmaker shower, and crown molding. There is a guest bedroom and office feature stunning crown molding and plantation shutters. The great room floorplan allows you to experience amazing views of the fairways, lakes, and bird sanctuary nature areas. Experience the best views PGA National has to offer. Invite your friends over to enjoy the Honda Classic. Additionally: SE Exposure; Newer Roof 2003; Updated Washer, Dryer, A/C, Water Heater, and Garage Door Opener; Newer Screens 2012.

547 Prestwick Circle

547 Prestwick Circle

547 Prestwick Circle - Screened Porch & View

547 Prestwick Circle – Screened Porch & View

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230 Caravelle Drive | Martinique | Abacoa

June 27th, 2014

Location. Location. Location. Magnificent home with an extremely large backyard located at 230 Caravelle Drive in Martinique of Abacoa in Jupiter. Within walking distance to restaurants, shops, and the Roger Dean Stadium, this neighborhood is classic! This two-story home features an open floorplan and large sliders to allow in plenty of light. An excellent kitchen for entertaining with an elongated island provides plenty Corian countertop space. The kitchen features stylish white GE Profile appliances and a large pantry. The family room with large sliders is wide open to the beautiful backyard and is located off of the kitchen, while the living room is perfect for gathering family and friends. This extremely-large, 1st-floor master suite is the perfect place to retreat in the evenings and features two large walk-in closets with custom built-ins. The master bathroom offers dual sinks and vanities, Roman tub, and a walk-in shower. Four very spacious guest rooms on the second floor share two bathrooms. One guest room features a private balcony. There is no finer place to enjoy the Florida weather and stunning sunsets than from the expansive screened-in patio. Entertain family and friends in the backyard large enough to host a soccer game or a volleyball match.

230 Caravelle Drive

230 Caravelle Drive

230 Caravelle Drive - Screened Porch

230 Caravelle Drive – Screened Porch

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74 Spyglass Way | Monterey Pointe | PGA National

June 27th, 2014

This spectacular home located at 74 Spyglass Way in Monterey Pointe in PGA National features a 1st-floor master bedroom, soaring ceilings, and ample windows to create a very light & bright home. The foyer area is tiled with porcelain tile set on the diagonal, while the rest of the first floor is elegantly set on square. A formal living room sits off the foyer and is brightened by the large bay window. The living room leads into the quaint family room and dining room, which peer out onto a beautifully-lush, landscaped, brick-paved patio. The spacious family room with soaring ceilings is extremely open and bright, with serene views of the lushly landscaped patio. The beautifully updated kitchen has been remodeled with cherrywood cabinets, including double pantries, stunning granite countertops, and stainless steel appliances. The master suite opens onto the lush tropical patio through large sliders and features volume ceilings and a large walk-in closet. The master bathroom offers a Roman tub, separate showers, dual sinks, and high ceilings. Two generously-sized guest bedrooms are located upstairs with a private and cozy loft area to accommodate guests. A tropically-landscaped patio offers plenty of privacy. This outdoor living area is brick paved and partially covered and completely screened in, creating the perfect spot to relax and entertain. Extras Include designer window coverings.

74 Spyglass Way

74 Spyglass Way

74 Spyglass Way

74 Spyglass Way

74 Spyglass Way - Screened Patio

74 Spyglass Way – Screened Patio

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11960 Torreyanna Circle | Bay Hill Estates

June 27th, 2014

Beautifully upgraded 4BR + library + media room with fabulous upgrades located on one acre at 11960 Torreyanna Circle. The Torreyana House, named after the beautiful and rare pine tree species, is situated on a private, full 1-acre lot overlooking the 18th hole of the PGA National Estates golf course, where membership is optional. Located in the southernmost end of Bay Hill Estates, its location gives the occupants a peaceful, unhurried, serene setting in a fine, upscale, gated neighborhood. Over 4,000 square feet of living is built around the private scenery, giving the feeling of the outdoors in the house. The cream-colored kitchen is the cutting edge of design for 2014, with stainless steel appliances, granite counters, French-door refrigerator, and double wall oven. The open family room is an extension of the kitchen with the same cream-colored built-ins, crown molding, and glass everywhere to enjoy the setting. The large living room opens onto the pool and beyond, bringing in the outdoors. The exquisitely-furnished master bedroom has beautiful views. Grey is the new beige, with fine expensive linens and brand-new Berber carpeting. There are 2 spacious walk-in closets.  The master bathroom has been completely redone with fine marble floors, Jacuzzi, counters, glass tile backsplash, and top-of-the-line cabinetry. The 3 guest bedrooms are furnished in bright, playful colors and patterns, adding warmth and a touch of whimsical feel to the house. The huge marble deck is fine Jerusalem stone, Flagstone stainless grill, Pebble Tek pool & spa complete with a new salt water system and heater, which is controlled by an underground propane tank, and Aqua controls from inside. Four bedrooms, library, media room, and fabulous upgrades and remodels throughout. There is surround sound throughout the house, central vacuum, accordion hurricane protection, 2 new water heaters, 1 new A/C, and a 3-car side-entry garage with built-in cabinetry.

11960 Torreyanna Circle

11960 Torreyanna Circle

11960 Torreyanna Circle - Screened Swimming Pool

11960 Torreyanna Circle – Screened Swimming Pool

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