If you’re anything like me one of my favorite reading materials poolside is a local real estate magazine. Surrounded by beautiful properties and scenery I like to flip the pages looking for a dream deal. Then it appears,
“4 bedroom 3 bath ocean front view, newly remodeled, $2250000 for 25% ownership”….What’s that all about?
Unlike time shares that offer ownership with many others , fractional ownership usually has less owners per property
25% ownership allows 13 weeks of use
Other advantages may be:
- Accommodations are guaranteed at a favorite vacation destination
- Terms of the purchase are easier to negotiate with fewer owners
- You will have more input into the management of the property
- Selling may not be difficult
- Wear and tear on the property will be less with fewer owners
- Shared expenses are easy to manage
- You have an opportunity to invest in a property that may be out of your budget as a whole owner
- Properties are usually spacious high quality homes or in smaller resort complexes
- This is an option to consider when purchasing a second home if a fixed usage period is offered or a rotation that fits perfectly into your schedule.
- If you’re looking to feel more at home with each visit you will want to look at a property that is unit specific for each use.
- Find a great vacation home and purchase with family and friends
Since this type of ownership can be complicated and loaded up with stipulations the agreement to purchase or sell should be drafted by a Real Estate Professional or an attorney. With limited financing options a method of payment should be stated before executing an agreement.
Happy home buying and selling….
Like many vacationers you probably have visited one of the beautiful coastlines in the USA. It’s so hard to leave when the week is over, so here are some tips to get you on the path to owning your own little piece of paradise.
To begin you have to decide where to buy. I like to suggest somewhere that is easily accessible to your home since you will want to enjoy it as much as possible for yourself.
Decide on a price point within your budget and prepare for cost that you would not consider when purchasing a primary home. After those decisions are made determine your short and long term goals especially if this will eventually be a retirement home. There are many vacation rental sites that can offer assistance to determine market value of seasonal rates for selected areas.
Owner expenses to consider:
Mortgage fees may be higher and a larger down payment may be required for a second home and real estate investments.
State and Local property taxes
Parking permit fees
Homeowners association or Owners Regime membership dues
Property Insurance that may include flood and wind
Special assessments for compliance of exterior maintenance and architecturally approved appearance
Mandatory utility charges such as a community wifi and or cable company
Recreation use fees for yourself or your visitors
Permit fees for repair or remodeling contractors
Business license fees if you are going to use your property for short term rentals
Local taxes on the rental income you receive
Advertising cost for your rental
Cleaning and laundry fees
Reserve for replacing appliances and furnishings as needed
Rental management fees
Reserve for vacancies and cancellations
Not all of the above may apply but are noted to assist you in making an informed purchase
Collect the rent and pay the bills!
With good planning you’ll own a piece of your vacation paradise with no reservation required!