For those who are interested in alternatives to full ownership real estate, who only want to invest in the amount of time they actually will be vacationing rather than full ownership, there are alternatives that involve purchasing just a portion or fraction of the property in weeks’ or months of the year. This can involve receiving actual titles or deed, or it can be a right-to-use, commonly 25 to 30 years.
Timeshare / Vacation Ownership
Timeshare ownership includes right-to-use properties or a more flexible points-based program. Owners purchase a condo or villa for one or more weeks use within a fixed or “floating time” system, which allows scheduling each year’s vacation during the most convenient week within a specified season. With timeshare, consumers have the opportunity to purchase time at resorts offering a wide range of amenities at different destinations. While most vacation ownership villas have two bedrooms and two baths, floor plans range from studios to three or more bedrooms. Ownership is usually a one-time purchase, which often is developer financed, owners then pay an annual maintenance fee based on the unit size, location and amenities.
Fractional Ownership / Private Residence Clubs
A step above timeshare is fractional ownership, which usually comes with fully deeded titles to your fraction. Fractional ownership has the benefits of second-home ownership, but for a fraction of the cost and without all the responsibilities. Considering the average vacation-home buyer uses the property just three to four weeks a year, fractional ownership tends to be more in line with the actual use of the vacation home. Additionally, fractional properties are generally affiliated with high-end hotel companies or high-end boutique operators, so owners have the benefits of personalized services and amenities. In addition to the purchase price, there also are annual maintenance fees to consider.
Destination Vacation Clubs
Members of a destination club are not buying a specific property, but rather the right to use any of a portfolio of homes owned or operated by the club company. With few exceptions, they offer a non-equity-based membership emphasizing a broad selection of vacation-home experiences. Most destination clubs also offer members concierge services. The average length of stay at destination clubs ranges from one to nine weeks, and costs include a one-time fee, although the club may also charge a nightly fee while guests are in residence.
Condo Resorts and Hotels
Condo hotels and resorts offer a portion of their hotel room inventory for sale to the public. The owner may use it for vacation or corporate housing needs or place it in a rental program, typically managed by the hotel. Owners then receive proceeds from the rentals. Buyers enjoy the benefits of owning real estate in a desirable location coupled with hotel amenities and services. Annual dues also apply. Condo hotel pricing varies by real estate market trends.