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Press Release - Vacation Home Fractional Ownership
The Benefits of Fractional Ownership
in Private Residence Clubs
By Joel Greene
Ezine@rticles
A New Way to Own a Vacation Home — For the Select Few:
Fractional ownership of vacation homes, also called private
residence clubs,
is a relatively new concept that allows you to enjoy four to 12
weeks of home ownership privileges per year at an upscale, luxury
resort but at a fraction of the cost of whole ownership.
If you want to own an impressive second home complete with personalized
services and located in an expensive resort area but can’t
quite justify the expense because you’ll only be using
it a few weeks or months of the year, this type of real estate
arrangement
may appeal to you.
Amenities Galore
Most private residence clubs offer extensive amenities. These
may include an extravagant clubhouse and spa, plus five-star
hotel
services, the kind you couldn’t expect to have in a wholly-owned
vacation home, high-end condo or timeshare.
Imagine this: You are going on vacation and you call ahead to
the staff at your private residence club home. At your request,
the
staff shops for your groceries, dry-cleans your clothing, makes
your restaurant reservations, heats your private splash pool,
and places knick-knacks and favorite pictures of family members
around
your residence. You are met at the airport by a staff person
who shuttles you to your home where a just-detailed Jaguar is
sitting
in your parking space for use at your disposal.
Get the picture? Private residence clubs are NOT your ordinary
second home.
Outstanding Locations
Fractionals or residence clubs have sprung up in exclusive, world-class
resort destinations worldwide. St. Thomas, Virgin Islands, Puerta
Vallarta and Mexico are popular locations.
In the U.S., the first fractionals were in major ski areas out
west, particularly Colorado where real estate was so costly that
wholly-owned second homes were out of the question for most people.
Eventually they spread to northeastern ski areas. Since then
fractionals have begun appearing in golf-oriented communities
like Hilton Head
Island, South Carolina and popular beach states like Florida.
Some of the most popular fractionals can be found in Jupiter,
FL; Aspen Highlands, Bachelor Gulch, and Aspen Snowmass, CO;
Lake Tahoe,
CA; and Whistler, British Columbia. Fractionals located in the
U.S. usually offer good access to major airports that allows
for easy transportation arrangements.
Management by Five-Star Companies
The key to the success of fractionals is their professional management.
Most are operated by well-respected hospitality companies known
worldwide for their world-class resorts. Among them are Ritz
Carlton, Four Seasons, Starwood, Intrawest and Millennium, brands
known
for their five-star services and amenities.
Hassle-free Ownership
Part of the appeal of fractionals is that they are completely
hassle free. In addition to having a staff for personalized service
at
your disposal, at a private residence club you never have to
worry about repairs, maintenance or housekeeping. Everything
is included
in the price and annual fees and taken care of by the professional
management company.
Appreciation Potential
To date there have been very few fractional resort developments.
The demand is high. As a result, it is likely there will be substantial
appreciation, rather than the depreciation that usually occurs
with timeshares.
Real estate experts say that the outlook for investment appreciation
appears excellent. You can expect at the very least an appreciation
parity against other real estate in the resort area in which
the fractional is located.
Prices
To buy a fractional, you pay a one-time purchase price and then
a yearly upkeep fee that covers all of the expenses associated
with property ownership and its use and services.
What do fractionals cost? Prices vary based on the size, amenities
and location of the individual property. But most are in the
$100,000-$500,000 range. Keep in mind that these are truly top-of-the-line
homes
that would cost you two to five times as much if purchased outright
as wholly-owned vacation homes.
Comparison of Fractionals to Timeshares
How do fractionals compare with timeshares? They really don’t.
Fractionals are far more exclusive and include many more luxury
amenities and services than timeshares. They tend to be larger
homes, usually three to five bedrooms. Timeshares usually allow
you use for just one to two weeks per year. Fractionals offer from
two to 13 weeks, and those don't necessarily have to be consecutive
weeks. Pick the weeks you want. With regard to financing, obtaining
a bank or mortgage company loan on a timeshare is difficult. Rates
are high, regardless of how good your credit. That's because it’s
a well-known fact that most timeshares depreciate over time.
Conversely, banks and mortgage firms consider fractionals to
be appreciating
assets and will often treat them like any other second-home purchase.
Why do fractionals tend to appreciate while timeshares usually
depreciate? There are a couple of reasons. With fractionals,
more of the buyer's dollar goes to high quality finishes and "bricks
and mortar" vs. sales commissions which can be as high as
40%-50% with timeshares. Furthermore, timeshare values have historically
been poor because of the large number of resales on the market,
not to mention a continuous stream of new developments. The fact
is the secondary market for timeshares has never really developed.
Conversely, there are a limited number of fractionals on the
market. Most likely, that number will stay small because fractionals
are
built in only the very best, most highly desirable locations.
Therefore, demand outpaces supply and results in property appreciation.
Comparison
of Fractionals to Condo Hotels
Fractionals (private residence clubs) differ from condo hotels
in that you have a set amount of time when you can use your vacation
home. Condo hotels are in fact, condos located within hotels.
You can use your unit whenever you want, and place it in the
rental
program when not using it. Fractionals do not offer rental program
participation.
Fractionals tend to be larger than most condo hotel units. Most
fractionals offer three to five bedrooms, while most condo hotel
units are studios, one bedrooms or two bedrooms. Currently, most
condo hotels are located in Miami and other surrounding cities
in South Florida. Fractionals are most prevalent on the West
Coast, particularly in ski areas. However, both types of real
estate are
rapidly gaining popularity and soon there will likely be more
of a supply across the country to meet the growing demand.
Joel Greene is the President of Condo Hotel Center located in
Miami Florida which specializes in the sale of condo hotels and
private
residence clubs. Visit his information-packed web site, http://www.condohotelcenter.com/,
for more details on these unique real estate products and to
see listings, photos and prices for condo hotels and private
residence
clubs. You can also sign up for his free Property Alert newsletter
to be notified when new properties come on the market.
Article Source: http://EzineArticles.com/
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