Live Like a Millionaire! Is Fractional Ownership for YOU?

By
Home Builder with Cobblestone Design Group

 

According to CNN Money Magazine, fractional properties are "the perfect trade-off," offering a "big, luxurious vacation home in a beautiful resort for just a tenth of the going rate." Fractional owners may not be able to add their personal flair with photographs and new wall colors, but they get two prime ski season weeks, two summer weeks and two additional off-season weeks. They also never have to contemplate maintenance.

The history of fractional ownership goes back to Utah, circa the 1990s, when Steve Dering of DCP International saw how underutilized the $4 million Aspen ski-country homes were. He figured he could offer an eighth-share for $430,000 instead. Fast-forward to 2007, where more than half of all real estate sales in Aspen involve fractional. The investment proved good for fractional owners too: a Deer Park Valley Club share in Park City that sold for $130,000 in 1998 is now worth $655,000 today, says Dering.

Fractional owners like John Nussbaum say that their luxury properties allow them to keep in touch with family and friends. "You can ask the kids to come to Appleton [Wisconsin] but there isn't a lot to do here," Nussbaum explains. Instead he purchased three units at Snowmass, Colorado, one in Cabo, San Lucas and one in Botany Bay, St. Thomas. For the price of one mansion, Nussbaum now has a stake in all his favorite vacation destinations. You could say he's become quite the popular guy!

While some high-end properties are priced to allow those making a household income of $200,000, the latest Ragatz Associates survey said the average median household income for fractional owners was $425,000.

Jeffrey Cerra

jeffrey@desertquarters.com

www.desertquarters.com

Comments (7)

Michael Sahlman
www.HomesForVIPs.com - Keller Williams Realty - Miami Beach, FL
e-PRO - Miami Beach Florida Luxury Homes

Definitely the way to go. Why spend a million when you can get it for a fraction of the price.

Jul 31, 2008 12:25 AM
Tim Haight
Pinal Realty & Property Management LLC - Arizona City, AZ
Broker/Owner

It works as long as everybody in the group is willing to go along. It is sometimes difficult to get more than two people to agree let alone a group of owners

Jul 31, 2008 01:21 AM
Setareh Mirian
Century 2000 Real Estate - Lafayette, LA

I agree! I am a Realtor in Lafayette, La and I have a property for sale in the gated community of Hidden Hills which is located about 15 minutes outside of Lafayette in Arnaudville, La. The property is listed at $499,000 and is truly a piece of Art made out of pure Louisiana history. All of the wood is from well known places in Louisiana that were torn down, all of the windows are from Churches, even some of the doors are from historic buildings and "haunted" buildings that were torn down by the city! The home is a solar passive home, multi-level and has the most amazing view of the 50 acre Hidden Hills Lake. Hidden Hills is a historic community in St. Landry parish where Native Americans actually used to live. The address is 93 Hidden Hills--you can see the listing and its pictures at http://www.maryannmirian.com/content/listings.html?ag_id=503090

This property would be a wonderful fractional ownership opportunity since it is located in an area full of nature, a large lake, nature trail, etc and some people have houses out there and use them simply as camps while other people choose to live there year round. For those would would want to keep it as a camp or get-a-way, it would make a wonderful fractional ownership investment opportunity!

 

Jul 31, 2008 01:23 AM
Jeffrey Cerra
Cobblestone Design Group - Buffalo, NY

Tim:

                I think when presented right there is no problem, People understand the benefit in these situations. There is a very detailed package of legal papers attached to these that spell out everyones rights, They have a usage calender and a management company that overseas everything, Now fractional ownership is not for everyone buyer usually understand they are are getting a deeded interest in a million dollar property.

Jeffrey Cerra

 

 

Jul 31, 2008 01:26 AM
Jeffrey Cerra
Cobblestone Design Group - Buffalo, NY

Setareh:

                      Drop me an email and we could look into it. jeffrey@desertquarters.com

Jeffrey Cerra

 

Jul 31, 2008 01:29 AM
Greg J. Gardner
Writer and Author - Black Friday - Banner Elk, NC
Writer and Author, RE Investor

It's a great practice and works well.

Jul 31, 2008 01:30 AM
Jeffrey Cerra
Cobblestone Design Group - Buffalo, NY

Greg:

                  If you every find anything that would make a nice vacation home send me an email if you have any interest in trying a fractional.

Jeffrey Cerra

www.desertquarters.com

 

Jul 31, 2008 01:34 AM