A New Way to Have a Vacation Home – For Few: Shared ownership of vacation homes, also known as private residency clubs, is a relatively new concept that allows you to enjoy 4-12 week home ownership per year at a luxury, luxury resort, but at a fraction of the cost of the entire property.
If you want an impressive second home with personalized services in an expensive resort area, but you can't justify the cost because you will only use them for a few weeks or months a year, this type of real estate agreement may appeal to you.
Amenities in Galore
Many private clubs offer many amenities. This can include an extravagant clubhouse and spa, as well as five-star hotel services that you wouldn't expect with a fully-owned vacation home, high-end apartment or timeshare.
Imagine this: you go on vacation and call the staff of your privacy club house. At your request, grocery store staff can clean clothes, pre-book a restaurant, heat a private pool, and share family-friendly images and photos of your family. At the airport, you will be greeted by a staff member who will take you to the home where your vehicle will be seated in the exact description of the Jaguar for your use.
Get a picture? Private clubs are NOT your usual second home.
Groups or residency clubs have formed in exclusive, world-class resort locations around the world. St. Thomas, the Virgin Islands, Puerta Vallarta and Mexico are popular destinations.
The first major ski areas in the US were located west, especially in Colorado, where real estate was so expensive that most people didn't need a second home at all. Eventually they spread to the northeastern ski areas. Since then, fractional participants have begun appearing in golf communities such as Hilton Head Island, South Carolina and popular beach states such as Florida.
Some of the most popular fractions can be found in Jupiter, FL; Aspen Highlands, Bachelor Gulch and Aspen Snowmass, CO; Lake Tahoe, California; and Whistler, British Columbia. US-based factional units usually offer good access to major airports for easy contact.
The management is run by five star companies
The key to the success of participants is their professional management. Most are run by reputable hospitality companies known worldwide for their world-class resorts. These include Ritz Carlton, Four Seasons, Starwood, Intrawest and Millennium, all famous for their five-star service and amenities.
Property without hassle
Some of the factions say that they have absolutely no hassle. Aside from having a personalized service staff, you never have to worry about repairs, maintenance, or housekeeping at a private residence club. Everything is included in the price and in the annual fees and is taken care of by a professional management company.
So far, very few resort developments have occurred. Demand is high. This is likely to result in a significant increase in value rather than the depreciation that would normally occur in a timeshare.
Real estate experts say the investment valuation prospects look great. You can at least expect an increase in parity value compared to other real estate properties in the resort.
To buy a fraction, you pay a one-time purchase price and an annual maintenance fee that covers all costs associated with ownership, use and services.
How much does a fraction cost? Prices vary depending on the size of the individual property, amenities and location. However, most of them range from $ 100,000 to $ 500,000. Remember, these are truly state-of-the-art homes that would cost two to five times more if bought directly as a fully owned vacation home.
Comparison of fractions with substitution
How do fractional participants compare to timeshare? They certainly do not. The factions are far more exclusive and include much more luxury amenities and services than timeshare. They are usually larger homes, usually three to five bedrooms. Timeshare usually only allows for one or two weeks a year. Groups offer two to 13 weeks, which do not necessarily have to be weeks in a row. Select the weeks you want.
When it comes to financing, it is difficult to get a bank or mortgage company loan for timeshare. Prices are high regardless of how good your credit is. This is because it is a well-known fact that most real estate rights are depreciated over time. Banks and mortgage companies, by contrast, treat property appraisers as property appraisals and will often treat them like any other home purchase.
Why are fractional individuals prone to valuation and timeshares tend to depreciate? There are several reasons. By splitting more buyer dollars goes into high quality finishes and “bricks and mortar” compared to sales commissions, which with timeshare can be 40-50%.
In addition, timeshare values have historically been low due to the high number of resales in the market, not to mention the constant flow of new developments. In fact, the secondary timeshare market has never developed.
In contrast, the market has a limited number of fractions. This number is likely to remain low as fractions will only be built in the best, most desirable locations. Demand therefore exceeds supply and wealth increases.
Compare Fractionals to Condo Hotels
Groups (private clubs) differ from apartment hotels in that you have a set amount of time to use your vacation home. Condo hotels are actually condos hotels. You can use your device whenever you want, and put it in the rental app without using it. The factions do not offer to participate in the rental program.
The number of factions is usually higher than in most apartment hotels. Most crumbs offer three to five bedrooms, while most apartment hotels include studios, one or two bedrooms. Currently, most apartment hotels are located in Miami and other surrounding South Florida cities. Fractions are most prevalent on the West Coast, especially in ski areas. However, both types of real estate are rapidly gaining popularity and more supply will soon be available nationwide to meet growing demand.