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Fractional Ownership  Explained                                                 

Fractional ownership is becoming widely accepted but the current economic climate and lack of bank finance could be the turning point that makes it a mainstream method of purchasing second homes and holiday properties.

Over at least a decade people have fulfilled their dream of owning a holiday home by borrowing against the increased value of their main residence and then borrowing further against the second property. In many cases 100% of the acquisition cost was funded by the bank leading to an extremely fragile property market in many popular destinations. The position is now very different due to falls in house prices and, with few loans available, those still wishing to own that ‘place in the sun’ must look at alternative means of purchasing these properties.

Fractional ownership has always been a highly practical and cost effective method of owning holiday property since you only own the time you are likely to spend in it – for most a maximum of 5 weeks. In simple terms, 10 owners could share the same property, all can enjoy more or less the same benefits as they would if they owned it outright and the cost is just one tenth.

To help you compare fractional ownership to other investments, 

 It is expected that sales of fractional ownership properties will now expand dramatically and this is supported by the increasing number of fractional developments on offer. Ritz-Carlton, Starwood, Hyatt and other well known names have fractional product that is selling and offering buyers resort style holiday facilities but with ownership and an element of investment potential.

When you decide to proceed with fractional ownership you own a fraction of the property, usually defined as a number of days out of 365 or weeks out of 52, and you continue to do so in perpetuity or until you sell or perhaps leave it to your family in your will. 

A Few Fractional Ownership Facts

As with any association, if an owner does not pay their fees, the association can place a lien and if necessary eventually repossess the fee simple real estate interest of that owner. Any financing a lender approves on a fractional sale interest can only be secured on the borrowing owner’s specific real estate interest.  A foreclosure would happen only on that fraction, there is no consequence to the other owners or their real estate interest.

Think of the group of owners as you would any group of owners in an association, such as for condominiums or a gated community.  There are Rules and Regulations, management oversight, expense management and democratic voting processes.  The main difference is that common expenses extend to the shared property, for example: utilities, furniture replacement and house repairs.In some cases there are 2- and 3-day gaps between fractions, and one 8-day gap. The longer 8-day gap is an annual period in early Fall left open in case of the need for more major maintenance and repairs. You can trade usage periods with other co-owners. Fractional Ownership also offers the chance to trade with other owners in the USA and the rest of the world.

The Location

Hutchinson Island Treasure Coast Florida is a barrier island full of tropical vegetation. Lounge on you balcony watching dolphins and sea turtles in the Caribbean currents that feed Hutchinson Island. Every form of entertainment is minutes away by car. Hutchinson Island is one of Florida’s jewels with 52 weeks of beautiful weather. There are miles of unspoiled and unclouded Atlantic beaches are a few yards away from the back door..

The Atlantic Ocean waterfront of Hutchinson Island provides inspiration and recreation for our human visitors, a natural habitat for marine life and a tempering influence on Hutchinson Islands unusually even climate. Considerable effort has been exerted to keep our beach habitat natural, unspoiled and accessible, and we’re sure you’ll agree its well worth it. Hutchinson Island has the near-perfect climate. The average conditions are mild and sunny in the winter and comfortably breezy in the summer. The area has an average annual temperature of 73.7 degrees between the extremes of normal winter and summer temperatures.

Information on Sea Palms

We are in the process of acquiring an Ocean Front Condo on Hutchinson Island. We will have  shares available for purchase in this 1 bedroom condo in the popular Sea Palms resort condominiums.

 Sea Palms Condominium is located on N. Hutchinson Island, Florida in what is commonly referred to as the Treasure Coast. We are the first condo ever erected on N. Hutchinson Island and stood alone for years until the UDT Navy Seal Museum was eventually built right next door. Today there are a total of 9 condos in a row at the southernmost tip of N. Hutchinson Island.. After experiencing hurricanes Frances, Jeanne and Wilma Sea Palms suffered the least damage in a 9 condo row on N Hutchinson Island because of our sturdy 100% poured concrete construction.

Sea Palms has a large selection of on site and nearby amenities including tennis courts, shuffleboard, heated tropical pool, beach access, private parking, snorkelling, waterskiing, surfing, biking, boating, sailing, shopping and great restaurants.

Fractional Owned 1 Bedroom Condo

We are offering 6 shares of 8 weeks of a 1 bedroom condo on the fourth floor of Sea Palms. The unit will be finished to a very high standard with marble flooring throughout. Designer fully equipped kitchen with granite countertops. A washer and dryer will be included. The living room is directly off the kitchen area. The living room will be fully furnished with Tommy Bahama styled furniture including a flat screen television with a Bose surround sound system. Wireless internet will also be available. The dining area will include a Tommy Bahama styled dining set with matching dresser. There is a small bathroom off the living room again finished with marble counter tops.

Access to the ocean front patio from the living room is through newly installed sliding glass doors. The marble tiled patio will be set up with a matching table and chair set to enjoy the beautiful ocean views.

The master bedroom has views of the ocean through the large windows. The master bedroom will be furnished with Tommy Bahama styled décor in keeping with the tropical theme. The master bathroom with granite top and dual sinks has just been recently remodelled. There is a large walk in wardrobe with marble tiled floors and ample hanging space for a large wardrobe.

The Costs

The cost per share will be in the region of $40,000 for 1 share of 8 weeks ownership per year in perpetuity. The 8 week period will be broken down into 4 two week time periods spread equally throughout the year. Each year your 2 week periods will advance by 2 weeks. Four 1 week maintenance periods will be used through out the year. Cleaning will be done to each unit after the owner has left.

The yearly fees will be divided between the 6 owners. To include management fees, association fees, insurance, taxes, and cleaning. The management company will also hold an owners fund of $6000 which will be used to cover any costs for maintenance. The owners will be responsible to top up the fund equally if any portion is used.

To Finish

You won’t find a more cost effective way to own your dream vacation home. A home that you can share with your family, friends and business associates.Your own share of a Fractional Ownership home.

 For Information

 Contact Ken Duncan by Telephone 305-320-6744 by email ken@yourfraction.net

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