Six Things to Do Before Buying a House With a Friend

Once you’ve decided to buy and share a vacation home with a friend or family member, there are a few steps to take to make sure things go smoothly.

• Create a limited liability company that will buy the property. This will help protect your other assets if something goes wrong.

• Be upfront about your finances and your credit scores. The lowest credit score will determine the mortgage rate — and whether you can get a mortgage at all.

• Create an operating agreement listing monthly and annual expenses, including property taxes, insurance, utility bills and maintenance costs (landscaping, pool cleaning, snow removal).

• Come up with a plan to cover the cost of incidental and unexpected expenses like a new roof.

• Set guidelines for access to the property. Do you plan to be there at the same time? Will the property be rented to offset your costs, and if so, how often?

• Plan for the future. Consider what would happen if one of you wanted to sell.