What is Fractional Ownership?
The official definition of fractional ownership is a 1/15th share to a ¼ share of a property. Title is conveyed by a deed, the closing occurs at a title company, and the deed is recorded. Colorado boasts the largest concentration of fractional ownership, which isn't surprising. Resort properties have increased in value dramatically over the years and many people can no longer afford a full ownership mountain property.
According to Ragatz Associates, a market research firm specializing in fractional ownership, in 2007 fractional sales in developed properties equaled $2.3 billion.
Obviously fractional ownership is not a product that would work in a suburban housing subdivision, because people actually live there full time. But in Summit County Colorado, where I sell real estate, at least 50% of the properties here are vacant 75% of the time, presenting a perfect scenario to better utilize these vacation properties.
Why May Fractional Ownership Work for You?
1) Price.
The first reason people are drawn to fractional ownership is price. Buying ¼ of a property is financially feasible for some people who may not be able to afford full ownership.
2) Size
You may be able to afford a studio in Summit County but don't really feel like sharing the same room with all three of your children. For the price of a studio, you can own a fraction of a three bedroom residence.
3) Location
As we know in real estate, location, location, location is the key to buying right. Unfortunately, ski-in, ski-out properties sell for upwards of $1,000 a square foot here in Summit County. Fractional ownership units often times can be found in great locations such as at the base of a ski lift or on the river with fishing rights.
4) Taste in Finishes
Fractional ownership properties, as a general rule, are newer construction and outfitted with modern finishes and amenities.
5) Convenience
In addition to looking good, fractional ownership properties are furnished down to the silverware and washcloths. There is no need to go to Target or Wal-Mart and purchase kitchen utensils and towels. Also, there is usually a cleaning company that puts the place back together after you leave and the next owner arrives, so it makes your vacation stay even more convenient.
6) Investment
Fractional ownership appreciates like full ownership of real estate. Plus, if you are not using all your time, you can put your fraction into a rental pool and gain some income from your investment.
7) Efficient Use of Time
Aren't we all busy?? Most people use vacation property from 3-6 weeks per year. That leaves 48 weeks unused and wasted. Fractional ownership cuts down the amount of waste and allows people to rent the property when they are not using it.
8) Standards
Similar to Number 4, people want what they want. Fractional ownership allows for people to have their standards met in a real estate purchase and still stay within their budget.
Summit County has a large variety of fractional ownership opportunities available ranging from condos to single family homes. If you love the mountains and want to make the dream of mountain home ownership a reality, you owe it to yourself to give me a call!
Authored by Amy Nakos, JD, CLHMS, Owner/Managing Broker, Landmark Real Estate Group, LLC, 111 Main Street, Frisco, CO 80443, 970-668-1430 office, 970-389-8388 cell, anakos@landmarkregroup.com
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