Luxury Fractional Ownership is becoming very popular. Great way to “own” a BEACH HOUSE without the high expense ticket. This Fractional Ownership is one block from the infamous Pacific Beach Boardwalk in San Diego, California. Fully Furnished all you bring is your favorite clothes.
A new breed of vacation home ownership is gaining steam that allows individuals to share ownership of a property.
However, if you split the cost among several buyers and ensure that everyone gets a slice, then the purchase makes sense.
That’s the theory behind fractional real estate ownership, in which second homes are purchased under a multi-owner structure and cost and access to the home is shared.
“It allows you to create a connection between the time you spend in the home and the amount of money you pay for it,” says Andy Sirkin, a fractional homeowner and attorney who specializes in real estate co-ownership at Sirkin & Associates [www.andysirkin.com]. “It causes fewer headaches, costs less money and I still get everything I want.”
The concept of fractional ownership may sound similar to a timeshare, however fractionals have fewer buyers which increases the amount of time available to each buyer and tend to be an option at more upscale destinations.
According to Sirkin, “the meaningful differences between most old-fashioned timeshares and most modern fractional ownership arrangements are the extent to which each participant’s rights and responsibilities are limited to a particular home or group of homes, and the extent of each participant’s ownership and control.
The concept is reserved for expensive homes in vacation destinations, and offered by both multi-unit developers and high-end resorts. Single-family homes make up a small, but up and coming, part of the market.
The fractional ownership structure is not ideal for every vacation homebuyer. Debra Savage, a real estate agent at Railey Realty [http://realty.railey.com] in Maryland says this type of ownership only makes sense with certain vacation and lifestyle goals.
“The biggest thing is how they plan to use the home. If they are only popping down on weekends once in a while then fractional residence makes sense. If you want to spend a whole summer here, it won’t work,” she says.
Just like in primary residential real estate, the main roadblock to fractional ownership is mortgage funding. “During the financial meltdown the market experienced a financing freeze,” says Sirkin. “Potential buyers got hesitant about buying anything. Now buyer confidence has returned, but financing is still a problem.”
by Cindy Vanegus, FOX Business