Fractional Ownership in Summit County

Posted by admin on November 20, 2018

There’s a term in the real estate world being used more often these days and it’s called fractional ownership. It’s essentially defined as shared ownership and usage of a luxury property and it’s becoming a more popular alternative to renting a timeshare or buying a vacation property. It happens when a group of people combines their resources to purchase a property together, they make arrangements to plan to who gets to stay when.

The concept of fractional ownership was created in the private jet industry where business owners could purchase shares in their own jet to reduce the cost of ownership. A management company would move jets and provide flight crews. If a company needed more time or a larger fraction of the ownership of the jet, they would buy more shares to accommodate their needs. In addition to aviation, boats, sports cars, and homes have all been purchased in fractions to allow more people access to high-end luxury.

Timeshare Vs. Fractional Ownership

Everyone has heard of timeshares and many have attended a sales presentation to invest in one. Timeshares are often used only one to three weeks a year for a vacation, and there is no ownership of the property. With a fractional ownership property, owners enjoy more time at the home. Sometimes four to thirteen weeks are possible when you own a larger percentage of the property. With partial ownership, you are able to stay at the house for vacation, in addition to receiving rental income from the property when owners aren’t using it. For people who seek longer time periods of ownership, fractional ownership is a better option than timeshares.

The ability to use the home as a vacation home for yourself, as well as a vacation rental, is an investment consideration to weigh when purchasing a fraction of a home. For example, if ownership of a home is for a month during the winter, an owner can stay for two weeks, then rent it out as a vacation property for the remaining two weeks. If the cards are played right, this could net the owner a significant amount of financial benefits that could help pay for their share of a mortgage and offset the costs of ownership.

Fractional ownership properties are more expensive than timeshares, but for someone looking for an upscale home without the burden of having to maintain it, it’s a great option. Fractional ownership creates long-term value, as well as short-term vacation ability. It also allows people with smaller budgets to be able to afford a luxury property. The arrangements can be flexible with each buyer receiving a quarter, an eighth, a tenth, or a thirteenth of the property depending on how many people are involved. The most popular is a quarter-year share.

These homes often include more amenities than the average property, which really sets them apart for an experience that families will remember for a lifetime. Most people can’t afford their own ski in-ski out property, but with fractional ownership of a condo or home on the mountain, it is possible. Not only are their locations convenient in their proximity to the slopes, but the inside of the homes shine with high-end finishes and construction details. This level of luxury makes the property more desirable when it comes time to rent, sell, or simply enjoy for one’s own vacation.

There is often a property manager involved to help schedule cleaning, as well as regular maintenance of the home and surrounding area. Like the arrangement between property owners needs to be defined clearly before the buying process begins, certain questions need to be addressed when it comes to recruiting a property manager to care for the home. Certain arrangements might not even warranty a caretaker at all. But for those who need a hand, owners need to determine the budget for this service, how dues will be collected, how rules will be enforced, what taxes a fractional ownership association must pay, etc.

Pros & Cons of Fractional Ownership

There are many considerations to take into account before choosing whether fractional ownership is the right decision. On the upside, home costs are shared, so for people whose budget doesn’t allow them to purchase a high-end home, costs are split among all the owners of the home to make it affordable. This creates a larger overall budget and allows buyers to buy bigger and nicer homes in more exclusive communities. Having shared cost responsibilities among several owners creates a larger balance to draw from when it comes to upgrades or repairs as well.

Some of the drawbacks include the fact that they can be more difficult to sell due to the nature of so many parties involved. Different people have different wants and needs. There may be conflicts related to the schedule or renovation plans. Even choosing a decor style can be difficult when so many opinions need to be considered. Like anything else, fractional ownership has its pros and cons. The only way to mitigate risks like these is to create an agreement that outlines the responsibilities of each owner and appropriate steps to take if anyone wants to sell their portion of the property.

LOCATION

In Keystone, 105 River Course Drive has partial ownership units available starting in the low $100,000s for a quarter share. The luxury villa is situated near the River Course and Keystone Nordic Center and also has access to the Snake River for fly fishing. In addition to golf and skiing, the area features hiking, biking in the summer and dramatic mountain views all year. Unit amenities include laundry, hot tub, clubhouse, heated underground parking and storage for owners.

DISCOVER SUMMIT COUNTY WITH WOLF REAL ESTATE

Discover Summit County at an amazing value! You can be part of a very special community by buying into a property with other owners who have the same interests you do. Develop your love of the mountain lifestyle you want from your second home while spending a mere fraction of the cost and sharing all the responsibility, upkeep, and monthly maintenance and management costs. This concept has proven itself here in Summit County and in numerous other resort communities.

Deeded ownership allows you to own the property as if you were purchasing it in its’ entirety. While you use your share of time, you are using the entire property. You don’t share your space and privacy, you only share the time in the home. And, while owning your deeded interest, you can finance, resale, title it in a trust or business, and transfer ownership to another party. One of the true benefits of this type of ownership is that while you have ownership to a fraction of the property, you can exchange use dates with other owners as it fits with each others schedule, and potentially customize your use each year. With shared ownership of second home properties, you not only buy into the property, you are buying a lifestyle that creates years of family memories as well as developing lasting friendships with other owners.

There are many properties available in Summit County offering shared ownership. If you only plan to use your home periodically throughout the year, which is typical of second homes everywhere, this could prove to be the right situation for you to finally enjoy your dream property in the mountains.

Contact the Wolf Team to schedule a showing, discuss potential investment opportunities and learn more about fractional ownership to see if it’s the right option.