Not your parents’ timeshare
Fractional ownership is emerging as one of the hottest real estate trends in resort communities.
In the past few years, Hyatt, Intrawest and Ritz Carlton, known in the resort development community for high-end projects, have not only jumped on the fractional ownership wagon, they have refined what the term means.
Different from “timeshare,” as it was known in the 1970s when purchasers bought just that ” time ” and not property, fractional ownership provides the owner with a deed and the potential for property value appreciation.
Instead of owning the whole unit, buyers share real estate with other people. As a result, they share the cost of maintenance and up-keep, which reduces the expense and responsibility of ownership.
“Fractional ownership is a good choice for people who don’t want to maintain a second home,” said Sharon Cole, assistant project manager for Hyatt Main Street Station in Breckenridge. “Studies show the typical second homeowner uses their property two to three weeks a year. That’s where this concept is geared toward.”
Deeded ownership means the owner uses the same unit on each visit, so time spent there feels closer to second homeownership than a vacation.
The deed also means ownership can be passed down through generations or sold through a real estate broker.
The Hyatt Main Street Station units are not marketed as investment properties, but the potential is there, Cole said.
“There aren’t that many resales,” Cole said of the project, located at the south end of Main Street in Breckenridge. “There has been an appreciated value,” on the few properties that have resold since the project opened in 2001.
Like the traditional timeshare purchases, fractional developments participate in global vacation exchanges, allowing travel to resort areas around the world through exchagne pools.
Fractionals can vary from 1/13 to 1/4 share, providing four weeks’ use per year or 12, depending on the level of ownership.
Ron Barnes, director of sales for Copper Mountain Real Estate, said fractional ownership seems to be working as a second home alternative because buyers are similar and typically get along well.
“They get to know each other and then have even more flexibility than the schedule sets out,” Barnes said.
The Cirque, Copper’s fractional ownership property, is 60 percent owned by Colorado Front Range residents. Copper decided to serve the demographic by installing a day use area so that families who visit Copper while not occupying their unit can still use the property.
Day use provides extra lockers and parking so owners can rest, change clothes, use the pool or meet on the property anytime they visit the resort.
Fractional ownership properties tend to offer the best in amenities.
The Cirque is located between the center village and Union Creek. It has two pools with fountains, a waterfall and an outdoor hot tub with huge views of the ski slopes.
The property has a “private club-like atmosphere,” said Barnes, with a children’s playroom, workout facilities and a comfortable lobby.
Hyatt Main Street Station in Breckenridge has a fitness room with views of the ski area, a media room with theatre-style seating, and outdoor pools and hot tubs.
Both projects are within walking distance of the ski lifts.
The fractional ownership concept is being extended from name-brand
products like the Hyatt and Intrawest properties to independent shared-ownership arrangements.
A $1 million property, for example, can be shared by four families that pay about $250,000 each (it typically costs about 120 percent of the original price for a quarter share) to use a luxury home one week of the month.
Weeks rotate on a schedule so that an owner gets to use the property for Christmas, July Fourth and other holidays once every four years.
The partners share in the management responsibilities or hire an accountant and other professional services to upkeep the property.
“It makes larger homes more affordable,” said Craig Walsh, managing broker at RE/MAX Properties of the Summit in Silverthorne. “It’s luxurious, instead of a condominium. Buyers who chose this route do so because they find their money can go a lot further.”
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