Non Profit Joint Ownership

[OHenry]

Oregon
We own 4/6 shares of a beach house, with 2/6 owned by 2 different unrelated families.
It is currently have it set up as a non-profit, but we want to make it a vacation rental. Can we do this as a non-profit or do we need to change entities?

 

[LdiJ]

Oregon
We own 4/6 shares of a beach house, with 2/6 owned by 2 different unrelated families.
It is currently have it set up as a non-profit, but we want to make it a vacation rental. Can we do this as a non-profit or do we need to change entities?

A vacation rental is going to be a for profit scenario. Therefore why would you attempt to do it as a non-profit organization?

 

[OHenry]

It was already a non-profit entity when we purchased shares. We would be changing it, but what entity would be the best fit (sorry if this was unclear)

 

[LdiJ]

It was already a non-profit entity when we purchased shares. We would be changing it, but what entity would be the best fit (sorry if this was unclear)

A Beach house being a non-profit just does not make sense. You could do an LLC. That is an appropriate entity for rental property.

 

[OHenry]

We have considered an LLC. The issue being it has been difficult finding an insurance company to insure this property because the owners are 5 individuals who are non-related. Any help is appreciated.

 

[PayrollHRGuy]

We have considered an LLC. The issue being it has been difficult finding an insurance company to insure this property because the owners are 5 individuals who are non-related. Any help is appreciated.

That's why you create an LLC.

 

[OHenry]

Because an LLC would be considered a single entity?

 

[adjusterjack]

That's why you create an LLC.

And you buy a commercial insurance package policy for property and liability coverage.

Any independent agent can do that for you.

But you aren't likely to get anywhere trying to find regular homeowners insurance.

Because an LLC would be considered a single entity?

Yes.

 

[OHenry]

How much more cost does a commercial insurance package cost (on average) . I know this will vary depending on specifics, but ballpark %?

 

[PayrollHRGuy]

A call to a local independent agent will give you a quote that actually means something. We don't know ANYTHING about the property.

 

[OHenry]

thanks, will do