With every day passing the economy still seems to be going down, property prices are still declining and more homes are going into foreclosure. Is this the time for you to considerer converting your second home into a fractional?
Let's look at a few things that you, as a current owner, should consider. You may have purchased that home some time ago and just don't use it as much as you used to. However, the taxes do not stop coming due, nor do the electric bills, HOA dues, maintenance, landscaping etc. If you do not live close by, then you are trying to rent and most likely relying on a property manager or realtor, which is probably not going well either. But maybe, through all of that, you still enjoy using your home from time to time. Why not consider converting it into a fractional vacation home? You could sell it off in 1/6 or 1/8 shares, possibly keep 1 or 2 shares for yourself, and free up some of your cash. This would cut down on your expenses and still retain some ownership that you would be able to enjoy when you want to. If you have a minimal mortgage or your property is free and clear, you could finance the other shares and keep your money working for you. If this is something you may have an interest in, please feel free to drop us an email at properties@desertquarters.com .
Does your home have more amenities than some of the others in your favorite vacation area? Are you in a major metro destination, on the beach or golf course? If your answer is yes, then maybe fractional ownership is something you'd consider giving some thought to. We could take a look at your property and give you an honest assessment of our thoughts on its potential for fractional conversion. While this is not the answer for every home, it is one worth considering if you're trying to sell your high end vacation home. As I said above, you can retain a share for yourself or sell the whole thing fractionally, and it could be marketed either fractionally or as whole ownership. Either way, you have nothing to loose and all to gain. We can assist you from beginning to end. This includes giving you a complete turnkey fractional project and we will even oversee the sales process. If you have a property in the $750,000.00 price range, and it is on the market now, then this is an option you should give serious consideration.
With the current market conditions not expected to get better anytime soon and the banks being extremely rigid with their loan guidelines, the days of buyers flocking to a destination area and paying whatever a seller was asking, are gone. The days of multiple offers coming in are few and far in between. With that realization, the concept of the standalone fractional vacation home is here to stay. Will it be easier to find 6 buyers willing to pay $150,000.00 to $250000.00 versus a million dollars or more? Most likely that is the case. Look at it from the buyers' standpoint. Six or seven years ago prices in major markets were getting 20% - 40% more in appreciation. You were able to buy a property, cover its expenses (to some degree out of pocket), and vacation there as well whenever you wanted. Buyers were still able to come out ahead because of the appreciation some of these markets were receiving.
That dream and investing process is over. Anyone that bought investment property in good locations and in a booming market made money and there was no strategy involved. It was almost as easy as throwing a dart at 10 listings and picking that one to buy. Those simple times of making money are over. Going forward, people will still want to own vacation property. That desire never goes away, but purchasing will be done in a much smarter and controlled fashion and in a way that makes sense. Before you spend 1.2 million on a vacation home, consider that the same 1.2 million may get you 4 or 5 luxury fractional homes in different locations. These are new times ahead and this manner of spending is here to stay. If you have any questions or comments please feel free to contact me at Jeffrey@desertquarters.com
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