Deciding whether or not to rent a co-owned vacation home is an important decision for any group of co-owners to make. By renting out your vacation home, you can generate income valuable income. Generating this extra income may seem like an easy decision, but some co-owners may feel differently for a variety of reasons.
The key advantage of renting out your vacation home is to generate additional of income. This extra income can help offset some of the costs associated with owning it, including mortgage payments, taxes, and house upkeep. If the property is being rented at a high enough rate/frequently enough throughout the year, it could be looked at as an investment and a significant passive income stream could be generated.
However, there are also potential downsides to renting out your vacation home. First and foremost, each co-owner will obviously have access to the property for less time each year. Some co-owners might not be willing to give up more weeks per year that they can use the home as these is already being split amongst co-owners. Another thing to consider is some co-owners might not feel comfortable renting their home out to people they do not know for privacy reasons.
There will always be pros and cons, but the decision will ultimately come down to you and your group’s situation. Each group has their own circumstances that will lead them to decide to rent the property or not.
Whether or not you want to rent your co-owned vacation home, you need to make the decision with your fellow co-owners as early on in the process as you can. This can be done formally through an Operating Agreement. An operating agreement is essential for a good co-ownership experience, as it allows each member to have their intended share and use of the property in writing, as well as the obligations of each co-owner. Establishing whether or not the home will be rented and how many weeks a year it will be rented in an operating agreement gets everyone on the same page right away, preventing any future disputes.
Once again, renting your vacation home can be a great option, but definitely isn’t required! It just depends on each groups differing circumstances. Whether or not you and your group decide to rent, Plum CoOwnership will always be there to help you as a guide during these decisions.