If you’ve always dreamt of having a home away from home, you may consider a family vacation home. A place where you and the family can get away at any time and still have the comforts of home is a dream come true for many families.
Before you jump in headfirst, though, there are some considerations to make as you learn how to manage a family vacation home.
Understand your Family’s Interests
Just because you’ve always dreamt of having a family vacation home doesn’t mean your family members are on the same page. Gauge everyone’s interest before investing in the home. If your children are young, they’ll likely enjoy having another home to go to and have fun with the family.
If your children are older, though, and you envision them inheriting the home and loving it as much as you do – ask first. They may like having the freedom to come and go, but when it comes to ownership, they may not want any part of it. This is a big factor in how to manage a family vacation home.
Setting up the Rules
If you will rent the property out to others or even share it with a dedicated family, it’s important to set rules. Everyone has their own preferences, but here are a few ideas:
- Pets – Yes or no? If yes, what type of pets and what are the rules? Can they go on the furniture? What should happen if the pet ruins the carpeting or chews up the furniture?
- Cleaning – Who’s responsible for cleaning the cottage before leaving? Will you hire a cleaning service or will the renters be responsible for leaving the cottage the way they found it?
- Maintenance – Who will handle the maintenance and pay for it? If you’ll hire out, how often will they visit the property and do things like change lightbulbs and air filters, checking the AC or furnace, or clean the gutters?
- Breakage – Who is responsible for paying for broken items? Have an agreement in writing so there aren’t any arguments when it happens because it will.
Splitting up the Time
With a family vacation home, splitting up the time, especially the important dates is crucial. Go over any important holidays, birthdays, or family celebrations to determine who will have the cottage on each date. This is important when you figure out how to share a family cottage. For example, New Year’s Day, Fourth of July (United States), Canada Day (Canada) and Christmas are all popular days that vacation homeowners want to escape to their ‘paradise.’
To avoid any arguments, split up the days ahead of time and in writing. If you need to swap mid-year, you can work out an arrangement that works for both of you, but again, keep it in writing so there aren’t any misunderstandings down the road.
Taking Reservations and Collecting Payments
If you will be renting out the home to others, who will be responsible for taking reservations, confirming with renters, and following up after their visit? What about collecting the rent payment? Do some research and find a vacation rental payment service you trust. There are hundreds of options, which frees up your time in chasing rents, eliminates the worry of a bounced check, and allows renters to pay in their preferred method either credit card, Venmo, or even PayPal.
Have an Exit Strategy
Just like when you buy a primary home, you need an exit strategy. Will you put the vacation home in your will and pass it down? Will you sell it when you’re too old to take care of it?
What happens if you have a financial crisis? Do you have a fast exit plan? Also, think about what happens if you and any co-owners have a falling out. Who will buy out the other family or will you sell the property and both exit?
What Will You Do With it When You Aren’t There?
A family vacation home is typically used as a second home rather than an investment property. As such, the home can sit vacant for long periods when not in use. This does a few things:
- Leaves you with bills to maintain a home you aren’t living in
- Leaves the home open to vandalism or theft
You may consider sharing the cottage with another family (shared ownership) or renting the vacation home out to others. At a minimum, you will need to arrange for someone to check on the property regularly, whether it’s another family member or property manager.
Enjoying your Family Vacation Home
What’s most important is enjoying your time together with your family at your vacation home. If you take care of the tedious details ahead of time, you’ll avoid arguments, stress, and even financial issues.
Set up the rules, create strategies, and revisit them annually to make sure you’re still on the same page as you were before. If you need to make changes, enlist the help of your accountant or lawyer, especially if you share the cottage with other families.
Knowing how to manage a family vacation home so you have the time away that you need, but still make money renting it out, is important.
Take your time when looking for the right vacation home and securing financing for it. If you take out a mortgage, make sure you can afford it along with the mortgage on your primary residence. Some people even take money out of their primary home’s equity to buy the vacation home.
You decide what’s right for you, and make sure you look at all factors before claiming ownership. When done right, owning a family vacation home can create some of the most memorable memories of your lifetime.