NEW YORK – Sept. 3, 2014 – More affluent buyers are turning to fractional ownership of upscale vacation properties. Unlike timeshares, fractional ownership divides ownership among fewer people, allowing each owner to stay in the unit for three to four weeks per year, instead of a timeshare’s one or two weeks.
Fractional ownership properties often offer access to concierge-level services and an option to stay at luxury properties in different locations.
Through fractional ownership, investors pay property taxes in the form of annual dues, which also include concierge services and utilities. They can sell their portion of the home, leave it to heirs, or place it in a trust.
Timbers Resort, Four Seasons, Fairmont and Ritz-Carlton are just some of the companies offering fractional ownership in the United States – with privileges also extending to properties in such locations as Tuscany, Cabo San Lucas and St. Thomas.
“It’s like having multiple second homes,” says Stearns Financial Services Group President Dennis Stearns.
Those making fractional purchases through Timber Resorts, for instance, pay anywhere from $310,000 for one-tenth of a two-bedroom cottage in Napa to $850,000 for one-twelfth of a farmhouse in Tuscany.
However, financing for fractional purchases can be difficult to find, limiting buyers to seller financing or loans through developer relationships with local banks.
Source: Wall Street Journal (08/29/14) P. M4; Martin, Anya
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