With the Baby Boomers looking to buy second homes at an amazing rate (inspite of the real estate slowdown) fractional share ownershipis gaining in popularity. Fractional ownership is going strong in many resort towns, such as Sunriver and Caldera Springs.
What is fractional share ownership, you ask? It is not a timeshare! You actually are a deeded owner of the property. You own an undivided share of the entire property, right down to the silverware and bath towels. The most common fractional program nationwide calls for eight owners per home with a usage of five weeks. In Sunriver, we most often see four owners or 25% shares with 13 weeks of usage.
Think about this - the average amount of time that an owner uses their vacation home is approximately six weeks per year. The average price of a home in Sunriver is $630,000. Why not consider the possibility of using a home as much as you reasonably would plan to and only pay $160,000 for it? And all of the utility bills, taxes, repairs & capitol improvements would be divided by four, as well. Some of you might ask about the possibility of renting such a vacation home and making some money. Well, most resorts tend to be seasonal, and actual rental days is in the 100 - 125 days per year range. Oftentimes renters are not all that careful about how they treat a home while on vacation. Think about the last time you checked out the front end alignment of a rental car vs. pothole (not that I've ever done that). In the case of fractional ownership, you share the home with other invested owners who tend to offer more care than the average renter. Wear and tear / depreciation is held to a minimum.
Not only do you get to use a nice vacation home for a fraction of the cost of a whole house, but you get to use all of the amenities of the resort (in this case Sunriver or Caldera Springs) - a pretty good deal!
I will say that fractional share ownerships are only as good as their agreement document. When looking into buying a share of a home, be sure to ask for and review this document. If one does not exist, ask for the seller to discuss the possibility of drawing one up with his co-owners. There is value in this document. It will reduce stress and discontentment. A common question is: how are the use weeks determined? or: can we trade weeks? How are capital improvements decided? Does spending of money need a majority vote? Or a super majority?
We have represented both buyers and sellers in fractional ownerships in Sunriver. We have some good insight in these products. So, don't hesitate to contact us to discuss this topic.
You can see our shared listings on our website http://www.buysunriver.com/