The 2 hour rule of co-buying property

There’s nothing quite like finally realizing the dream of buying the perfect vacation home. But it’s important to remember that vacation homes are like all homes: they have a steady stream of maintenance problems that will need fixing. And vacation homes situated a little closer to nature than your primary residence - like a beach-front property or a secluded cabin - come with their own list of unique management issues (Salt water damage is no joke).

These issues can be a pain on their own, but when you factor in travel to and from your vacation home, that pain can turn into a much bigger problem. All of a sudden you’re paying for a property manager and having to get a septic tank replaced over zoom.

That’s why we recommend a simple solution: the 2-hour rule.

What is it?

It’s pretty self-explanatory: keep travel time to your new vacation home limited to two hours. Two hours is a pretty comfortable amount of travel in case you, or one of your group, need to drive out and address something; whether that’s simple upkeep and maintenance or a more urgent issue, for example:

• Small things like: cleaning, lawn care/landscaping, stocking supplies, replacing light bulbs, etc.
• More Urgent things like: evaluating damage and repairs, meeting with contractors, receiving large deliveries (appliances, doors, windows)

Assigning responsibilities

Say you own your vacation property as part of a group. Whose responsibility will it be to head out and  address your vacation home’s issues in person? This is a situation where taking the time to create a comprehensive operating agreement will prove invaluable. If responsibilities like this are laid out clearly in an operating agreement that everyone agrees upon, then you’ll be saving yourself a lot of future annoyance.

A common solution to the travel issue is to name a designated traveler. This could be the group member who lives closest to your shared vacation home, or the person who has the most free time available to travel on a moment’s notice. Whether you designate one person, or share the responsibility amongst the group, it’s also worth discussing a situation where whomever travels to address these issues is reimbursed for gas and travel time.

All of these details should be documented, and agreed upon, as a clause in your operating agreement.

Nestment, Inc. does not guarantee and is in no way responsible for the accuracy of information provided in this blog post. All information is provided “AS IS” and with all faults. Data presented here may not reflect all real estate activity in the market.  While the information on this site is about legal and tax issues, it is not intended as legal or tax advice or as a substitute for the particularized advice of your own attorney and tax professional.