What you need to know before buy a vacation house with friends



June 2022

Joint ownership is becoming an increasingly popular way to afford a vacation home, or even a first home, as home price and inflation soar. Between April and June 2020, 11% of buyers of all age groups purchased as an unmarried couple, according to the National Association of Realtors, a 9% increase from the previous year, indicating a big shift in attitudes toward nontraditional models for home ownership. 

There are huge upsides to owning a property with friends. First, what was once a pipe dream can suddenly become reality once you combine multiple incomes to buy a vacation home. Maybe you’ve got the budget for a little cottage on a remote lake with bare bones amenities. When you pool your money with your best friend and her family, suddenly you’ve got the funds for a 4-bedroom luxury cabin on Lake Tahoe with a boat launch. Your money can go a lot further—and the potential for future rental income and equity becomes that much greater.

However, there’s a lot to sift through logistically when it comes to making a purchase like this, and it can be easy to overlook the emotional side of the equation and the potential for conflict that a complex financial transaction can often create when mixed with relationships.

Here’s how to buy a vacation house with friends before making the decision.

You’ll need to have “the talk”—the one about money

No matter how close the friendship, money can still be a taboo topic of discussion. But if you’re buying a home with friends, you’ll need to lay all your cards on the table, including your salary, your debts, your credit score, and what’s sitting in your savings and investment accounts. Think about it just the way you would if you were making the purchase with a significant other. Talk early, talk often, and talk openly about finances with your fellow co-buyers. 

You’ll likely need to hire a real estate attorney

Getting approved for a mortgage is less straightforward when you’re buying as a group of friends. One less-than-stellar credit score in the bunch can upend the whole process, and there are a variety of legal decisions you’ll need to make as a group throughout the purchase, so you’ll want sage legal advice on how to navigate any wrenches thrown into your tropical vacation villa plans. Established legal frameworks are already in place for married couples purchasing a property together, but not groups of co-owners. These uncharted waters are best navigated with a trusted expert.

You’ll need a co-ownership agreement

Speaking of real estate lawyers, you’ll want yours to draw up a co-ownership agreement for you. This is a document jointly crafted by the group that will ultimately become a legally enforceable contract to establish an operating structure for your home. It might include:

  • Roles & responsibilities (Who pays the utilities? Who calls the plumber when the drain is clogged?) 
  • Agreements around renting out the property and other guests coming to stay (i.e. no “surprise” bachelor parties on the premises)
  • Contingency plans and exit strategies for all buyers
  • Maintenance plans for the home (How does the group pay if the home needs a new roof?)

Consider a co-ownership platform

The logistics, management, and interpersonal negotiation can take the fun out of owning a vacation property with your pals. If all parties aren’t on the same page, even small disagreements around how to decorate or whether or not to hire a professional cleaner can blow up into larger arguments.

Kocomo is a co-ownership platform that fully takes on the legal and logistical aspects of buying a vacation home with friends. Once you settle on a home you love, either from Kocomo’s platform or a home you’ve found together, Kocomo purchases the home on your behalf through an LLC and acts as a neutral, third-party administrator to handle maintenance, taxes, cleaning, and even equitable scheduling—so no fights over Melissa & Dave trying to use the house over both Thanksgiving AND Christmas. 

Kocomo homes are beautifully appointed and furnished by pro designers, which will help you side-step any arguments about the decor, and they’ll even facilitate renting out the house if it’s not in use by an owner. The legal aspects of ownership are all kept under Kocomo’s jurisdiction, from closing on the house to members wanting to sell their share, so all you’ll worry about is whether to have happy hour by the pool or on the roof deck. Sounds nice, doesn’t it?

Remember, it’s supposed to be fun

Owning a vacation spot with your best group of friends can be a lucrative financial decision and a great way to get more bang for your buck—but don’t forget it’s supposed to be fun, too. If the hassle of documents, negotiations, and disagreements are getting you down, there are options to make the whole process simpler and run those more emotional decisions through a neutral third party. 

Get the full guide about how to buy a home with friends with Kocomo. 

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