Buying a ski home isn’t just for wealthy older people anymore. In recent years, we’ve seen a change in approach for how many people buy ski properties – millennials especially.
Traditionally, when buying a ski apartment, people only do so with their spouses. In more challenging economic times, however, it makes sense to explore different property ownership avenues – such as purchasing with friends and family. Doing so, people are able to afford properties that would normally be out of their budget, such as ski apartments and even luxury chalets.
How does it work?
Shared ownership with friends or family members rather than a spouse can be a solution that makes a lot of financial sense; it enables you to own a ski property you wouldn’t have been able to in other circumstances. Imagine if two couples jointly owned a property together? That would mean money from four people covering the investment. Like a mini consortium!
This could be helpful in a number of circumstances. For example, if you don’t have a joint income with a partner and a second home purchase is out of reach as an individual, then choosing dual ownership with friends or relatives can make your property dream become a reality.
It’s easy to see the benefits of investing in property with friends and family; it essentially levels the playing field. This allows younger, unmarried people to invest in a ski property when they want – rather than having to wait till later in life.
Of course, a joint ownership property venture will take work, negotiation, understanding and compromise. You need to be agreed on a variety of different things but with careful planning and open communication, it could be the best decision you ever make.
You can invest with one friend, four friends, a sibling, a parent… Whatever works for you!
What are the pros and cons?
The benefits of shared ownership are clear. You get all the standard ski property benefits – such as having gorgeous holiday home to get away to and an additional income stream – but with the costs and duties related to managing a ski property split among multiple people.
You will be splitting not only the property purchase price but also the agent fees, the ongoing maintenance fees, estate management, legal costs and not to mention decorating and furnishing costs. You will also be splitting any rental income that you may earn through renting your property out to others.
There aren’t any real cons when it comes to shared ownership – as long as you do your research. Looking into the following things can save you a lot of stress in the long-term, ensuring your shared ownership journey goes without a hitch.
The legalities of going into a joint ownership venture: You will need to look at setting up legal protection for your investment to account for various situations. For example, liability in the event of another co-owner entering financial difficulty and being unable to pay their share of the mortgage.
The property laws in the country you’re buying in: It’s important to know your restrictions. In France, for example, buying property in this way is called ‘l’achat immobilier en indivision’ and according to their laws, if one party wants to sell the house, the other party cannot oppose it. Ensuring all the parties are clued will help you avoid any pitfalls, and seeking independent financial advice with an expert is a great way to do this.
Setting up a joint account for expenses related to the property: This will ensure that each of you are contributing the agreed amounts. It’s a good idea to also set up a separate fund that you each contribute regularly to which you can use as a rainy day fund – or when something breaks, needs repair or there is any kind of emergency with the house further down the line. This way the costs don’t end up being covered by just one of you.
Buy to let
Buying to let is a fantastic option if you are investing in a ski property with friends or family, especially if you find a property near a top resort or even a smaller resort that’s investing in its infrastructure. You can agree on dates around the year when each of you will have the property and then rent it out at other times – allowing you to earn an extra income.
Renting out your property for even half of the year can bring you a sizable rental income. If you find a nice ski home in a location that has dual seasonality, you would probably find yourself in a position where the property is sought after all year round – hopefully allowing you and your co-owners to find a few weeks here and there to enjoy your pied-a-terre yourselves!
As you can see, if you’re looking to get involved in ski property investments, then dual ownership can be a fantastic option. It offers many of same benefits as investing alone but allows you to share on the costs. The question is, who would you share the ownership of a ski property with?