The Top 5 Reasons You Should Use Fractional Ownership to Buy Your Next Vacation Home
Fractional real estate ownership is once again gaining steam as the fastest growing form of second home ownership in the U.S. and abroad, particularly in destinations such as Costa Rica, Mexico and even in Argentina. But you may be wondering, what is fractional ownership and why is it called the smarter way to own a vacation home?
Here’s the simple answer: You buy into a luxurious vacation home or beachfront villa at a fraction of the price, and it’s available for you to use about as much you would like using simple and equitable reservation policies. To save you even more money (and headaches), you split upkeep costs with other like-minded homeowners, let a dedicated staff and management company take care of the work and details, and you sip margaritas on your swanky veranda with your friends and family.
This is not your father’s “timeshare”. As a matter of fact, it is quite the opposite.
Fractional ownership and private residence clubs are hot in the second home real estate market, and that’s part of the reason resorts like the Four Seasons and Ritz-Carlton are offering them to their affluent clientele. Warren Buffett, who we all know is one pretty smart guy, owns the majority stake in NetJets the largest fractional private jet company. Even Mr. Buffett agrees, this is the smarter way to own.
Why Consider Fractional Ownership…The Better Question is Why Not?
With fractional vacation home ownership, you get the luxury home you’ve always dreamed of paired with the services of boutique hotel and with none of the headaches. You just show up and enjoy. There’s a reason fractional ownership is called “the smarter way to own”.
From Aspen to Asheville, Mexico to Costa Rica, prudent buyers are opting into a share of a $1M+ vacation home at luxury private residence clubs, with deeded and titled share prices typically ranging between $100,000 to $300,000.
Here are the top 5 reasons why people are using fractional ownership and the reasons they’re telling their friends about it too:
1. The Almighty Dollar – People used to buy second homes hoping for big gains in equity to justify their indulgent purchase. Thousands of those buyers are now in foreclosure or buried in expenses. For a dream home you’ll use only a few times a year, paying an eighth or a tenth of the price is simply a smarter use of your money. For less than $200,000, a lavishly furnished, $1.5-million-dollar villa overlooking the Pacific Ocean can be yours (with 7-other like-minded people). The price is unbeatable and in today’s unpredictable market, fractional ownership – which includes a deed and title like any other real estate that can be sold, will or transferred to your kids – is simply the way to buy.
In addition, monthly costs like maintenance, property taxes, and utilities are all divided by the number of owners, saving each owner tens of thousands of dollars a year. The only downside is that from time-to- time you may not get the exact dates you want…but frankly it’s rare at most Residence Clubs. For most people, missing one or two specific dates is worth a cool million in savings.
2. No Hassles – With a second home, especially abroad in countries like Costa Rica or Mexico, individual homeowners are responsible for upkeep, bills, and annoyances that take away from vacation time and these daunting tasks can be frustrating at best.
With fractional ownership in a private residence club, the management company has the maintenance headaches taken care of and the bills paid. No need to find a plumber in Costa Rica while living in Atlanta!
As any homeowner knows, the only thing worse than a tree falling on the house is dealing with the insurance company and tree trimmer in a country where you don’t speak the language. With a private residence club, you sit on the deck and enjoy your fire pit with a nice glass of your favorite adult beverage while the bilingual and friendly staff takes care of the rest.
3. The Wow Factor – Although many people dream of owning a vacation home in Costa Rica or Mexico, most can’t afford the one they really want. Say you have a budget for a vacation home of $400,000, which in many top destinations buys you a small, tired, older home. With fractional ownership in private residence clubs, for much less money you get a new home, new interiors and a full-staff built right in. And you still have a lot of money in your bank account!
For example, in Costa Rica, $800,000 -$1,000,000 stunning hacienda style villas in the gated golf and beach resort community of Hacienda Pinilla at the exclusive Hacienda Club (www.HaciendaClubCR.com) start at only $98,000, for a one-eighth deeded share of a large three-bedroom villa. Ownership in one of these luxury villas comes with $100,000+ in luxurious interiors, a golf club membership, a beach club membership, your own $15,000 golf/beach cart in the driveway, maid and personal concierge services. Forget the fixer-upper or spending $1M and get your hands on some luxury living for a fraction of the price.
4. Services – With fractional ownership, your home is kept in perfect condition and is ready each and every time you arrive, down to the fridge being stocked with your favorite groceries. You just show up, hang your clothes (unless you want that done for you) and relax. Your Club Concierge is available to book restaurant reservations, tee times, lift tickets and spa treatments as you indulge and relax during your vacation. When you leave, toss the dishes in the sink and don’t bother making bed. No worries, no hassles, just the good life made easy.
In addition, owners in residence clubs enjoy far more privacy in their homes than they would in hotels. And the difference between a 400 sq/ft hotel room and a 4,000 sq/ft villa with two family rooms is quite a contrast. The common areas of a residence club aren’t crowded either, as there are fewer people vying for the space at the pool or the gym. Because the homes get used less than a hotel room or a vacation rental (and built-in dues replace worn out furnishings) this is as close to your very own private home as you can get.
5. The Exchanges and New Adventures – Most luxury fractional Residence Clubs have exchange programs that allow Owners from one Club to exchange weeks with Owners from other Clubs. So instead of heading to Costa Rica each year 4-5 times, you can go to another getaway in Mexico or Italy or a big ski vacation in Park City, UT or Aspen. And your Club staff will handle the details via one or two emails. So as you might expect, most private residence clubs are located near world-class attractions, rare natural wonders and exhilarating outdoor excursions, so why not mix up your vacation from time to time.
With many more than 5 reasons, the benefits of fractional ownership through private residence clubs are pretty clear. So explore your options and discover how you can have your very own vacation home and a slice of the good life…at a fraction of the price.