Originally Posted by dupersc
Anyone doing this? Do you like it? Pros, cons?
A co-worker sent me some info about a local mountain breaking ground for some condos for next year. Never heard of it but it's an interesting idea.
Wish I have the money
For about a year and half, I was a salesperson for the new Four Seasons at Teton Village in Jackson Hole. We sold outright ownership and fractional ownership of very high-end condos.
Many of our fractional buyers were people who had *lots* of money and could have afforded a full-time second home in Jackson Hole very easily. If you look at industry statistics, however, you'll find that most vacation-home owners only actually occupy that home about 20-25 days a year. That means the property remains unoccupied most of the year, or you rent it out and live with the wear and tear that goes with that.
In fractional ownership, in many ways you pay only for what you use, not for the rest of the year. In most cases, you have fee simple ownership of your fraction, which means you call sell it, deed it, go into a partnership on it, whatever. Whether it materializes or not is hard to say, but if there is market appreciation of the fractional interests, the owner gets the benefit of that as well.
It's not "cheap" in any sense when you calculate nightly costs, but you're also not paying for an entire condo. Our Jackson Hole Four Seasons sold 1/14th interests, which entitled the owner to 14 nights one year and 21 nights the next, rotating that way forever. For that, you paid about $170,000 (two bedroom) or $235,000 (three bedroom) in upfront purchase price and $7,000 (two bedroom) or $9,000 (three bedroom) annually in homeowners fees. If you do the math, that works out to around $450 per night for a three bedroom, not including the purchase price. That sounds pretty expensive until you consider that same three-bedroom condo rents for over $3000 per night in the winter and $2200 per night in the summer and are nearly always rented winter and summer. To purchase outright ownership of the same condos is in the neighborhood of $2,000,000.
So it's certainly not for everyone, but we had some incredibly sophisticated and wealthy people who felt fractional ownership made more *economic* sense than outright ownership. It all depends on your goals and your situation.