One of the things to keep in mind whether you are buying a fractional or selling your luxury home into fractional real estate units is how the years is broken up to the individual fractional owners. Typically each year is rotated so that each owner gets their fractional use of his/her real estate during the key holiday periods.
The amount of use weeks per year is determimed by the number of fractional real estate owners and the number of weeks allowed for maintenance. For example, one example of a ski chalet fractional that is divided amongst four fractional owners, is the use of one week per month that rotates in the following year. Another example is 2 weeks each season if there are say, 6 owners of the luxury home, villa or condo.
Extra value that helps the future appreciation of your fractional real estate ownership is if there is the possibility to rent your weeks out. So for example, if you own 1/6th of a beach home, you have the ability to make an extra $2,000 or more per week for the weeks you won’t be using.
It also would be wise if you are a developer or seller of the luxury home to offer ‘guaranteed” rental income for two weeks out of the year, in prime season to the potential buyer. This is a nice added feature to your fractional marketing as it is an USP over other fractionals a buyer may be looking at. Additionaly, in prime season, there should be no problem renting a $1 Million plus luxury home/condo so the guarantee is not as risky as you might think. If you can’t rent it out…then the home or condo is most likely NOT in a location that is suitable for fractional real estate ownership.