Does your family love the idea of owning a lake cabin or vacation home, but dread the added maintenance of a second home?
Next Generation of Lake Cabins:
Our “Next Generation of Lake Cabins” offer a maintenance-free lifestyle set within all the amenities of your favorite resorts. Enjoy our rustic and upscale lake homes, on-site resort amenities and rental program without any maintenance.
Consider the single family lake cabin. The time honored choice for most. This type of ownership offers you maximum flexibility to use your cabin or vacation home whenever you choose. Such advantages come with the responsibility to maintain the property. Today’s prices for a well appointed 3 bedroom cabin on Lake Superior start at $650,000 and reach up to well over a million. In the Leech Lake area, a 3 bedroom cabin starts at around $500,000 with prices also over a million. Approximate monthly costs in the range of $5,000 to $7,000 are typical for this type of ownership.
Odyssey offers several types of lake home ownership. Some are very similar to what you’d find with residential property. Others are unique to resort communities.
Resort Whole Ownership:
Similar to single family cabin ownership, in that one party owns the entire home, this type of ownership offers you maximum flexibility to use it as much or as little as you’d like. A primary advantage of whole ownership within a resort setting is the maintenance-free lifestyle. Add our established rental programs utilized by 95% of our owners and this type of ownership is much more affordable than a single family lake cabin. Whole Ownership of a vacation home in our resorts range from $300,000 to $700,000 and our ski in-ski out condominiums in Lutsen start at $99,000. After utilizing the rental program, typical monthly costs for whole ownership range from under $1,000 to $2,000.
Resort Fractional or Shared Ownership:
The fastest growing part of the vacation home industry, fractional ownership means that you “share” ownership of the cabin with other owners. With the average American taking 13 vacation days a year, purchasing an entire vacation home may not be the best value for your family. With this type of ownership, you receive a deeded interest that you own forever, or until you choose to sell, just like your primary home, however, no owner has any liability for another owner’s financial obligations or for that owner’s share of the costs of ownership. All maintenance, interior and exterior, is handled by the resort staff. There are currently 153 fractional projects in North America and despite a challenging real estate market, the sales of fractional properties grew by 8% in 2007. Today, we offer fractional ownership at our resorts from $99,000 to $229,900. If you participate in the rental program, typical monthly costs are approximately $500 to $1,000.
History of Fractional or Shared Vacation Home Ownership
Although this concept may be new to some, many luxury markets have been taking advantage of “fractional” or “shared” ownership for years. Owners of private jets, yachts and exotic cars realized long ago that it did not make economic sense to own these assets outright when you only use them a “fraction” of the year.
The practice of “sharing” ownership costs between non-related parties was started in Europe and first reported in the 1960’s. The practice was introduced in the United States in Park City, Utah in 1996 and the category has experienced significant growth every year since.
Clarification of “Fractional” or “Shared” Vacation Home Ownership vs. Timeshare
The terms “fractional” and “shared” as they relate to vacation home ownership are used interchangeably. Simply stated, fractional/shared ownership is the legal division of any asset into multiple shares or portions. If the asset is real estate property, it is the title or deed that is spit into shares. Any appreciation of the asset belongs to the owner. The owner has the ability to sell or put the property in trust, just as with a primary residence.
A “timeshare” on the other hand, is a totally different concept and not interchangeable with either “fractional” or “shared”. With a timeshare, rather than buying a share of property represented by the title or deed, you typically are buying units of time.
Typical Fractional Splits
Odyssey Development offers three types of ownership: whole, quarter-share and sixth-share. (Not all properties offer all types of ownership.) Some owners choose to purchase multiple shares of the same unit. For instance, some owners consider (2) quarters or (2) or (3) sixth shares as a better match for their budget and use needs.
Throughout the United States, there are many different shared ownership types available for consideration. Typically, the higher the property value is, the more available it is in smaller shares, some offering one-twelfth shares.
Projected Future Growth of Shared Second Homes and Shared Vacation Homes
The concept is certainly here to stay. Ragatz & Associates, the leader in resort marketing, reported the following statistics for 2007:
- Fractional products grew by over 8% — no other real estate product saw any growth in the same period.
- Sales of fractional homes exceeded $2.3 billion – in 1999 the reported sales were $130 million.
- Fractional ownership continues to experience very high customer satisfaction. Key to the satisfaction is the belief in the “value” of their ownership, meant to include time spent with family and friends, not just financial value.
- Property Management plays the key role in the continuing satisfaction of ownership.
- The number one source of new buyers is existing owner referrals.
What is Included in a Shared Owner Vacation Home Purchase?
This is a good question that will vary depending on the development. It should, by definition, always include a deeded property. Your type of ownership will determine the amount of access and usage you have as an owner. Your management company will typically pre-determine a long-range calendar that rotates weeks, so that over time, you have access to prime seasons and holidays in an equitable spit with other owners. This is how all Odyssey Vacation Home Ownership is handled.
In addition, depending on the property, there are many possible add-ons that may be included in your purchase.
The calendar and all inclusions offered by Odyssey Development can be discussed with our Real Estate Representative.
Lifestyle Considerations for Fractional Owners
At Odyssey Resorts, we understand the majority of our shared property owners have purchased more than a vacation home, they have bought a certain lifestyle that allows carefree vacation getaways. They chose a resort setting because they want a home away from home where they can bring family and friends to relax and enjoy themselves.
Odyssey Resorts deliver a lifestyle experience for today’s family who wants to enjoy the great outdoors but in the great comforts of their own home, without maintenance, upkeep or worry.
Odyssey Development Leads the Shared Ownership Trend in Minnesota
Odyssey Development, represented by Odyssey Real Estate Group, introduced Shared Vacation Home Ownership on the North Shore of Lake Superior in 2005 at Larsmont Cottages. This full-service family resort was designed with today’s life style in mind: upscale, fully furnished, convenient maintenance and housekeeping services, in two and three bedroom cottages that feature a unique “lock-out” floor plan for versatile owner use and rental income opportunities. Sales of the 40 units, sold in quarter-share “fractions”, were widely accepted and sold out very quickly. There are currently a limited number of re-sale units available. View more information about ownership at Larsmont Cottages on Lake Superior.
The next grand opening of newly constructed shared ownership vacation homes was in May 2007 at Trapper’s Landing Lodge on Leech Lake in Walker, Minnesota. Sitting on a property formerly known as Merit Lodge and once owned by Huddle’s Resort, Trapper’s Landing Lodge features a full-service marina offering boat slips to owners along with boat rental and water sports activities. Sales of Phase I are nearly complete and Phase II is in development, offering a series of stand alone two and three bedroom Hudson Bay Cabins. This in-land lake vacation destination offers Sixth-share, Quarter-share and whole ownership packages. View more information about Trapper’s Landing Lodge.
Grand Superior Lodge Lake Homes North near Gooseberry Falls State Park on Lake Superior’s North Shore is the newest Odyssey Resort to offer Fractional Minnesota Lake Homes. This newest shared owner resort property has only four three-bedroom lake homes, all with authentic log home construction. Offered in both quarter-share and sixth-share units, this new lake shore property sits on 1500 feet of shoreline that is shared with Grand Superior Lodge on Lake Superior. View more information about Grand Superior Lodge and Grand Superior Lodge Lake Homes North.
Whole ownership is available in condos, town homes and spacious Poplar Ridge three and four bedroom homes atCaribou Highlands Lodge in Lutsen Minnesota. This slope-side resort offers the most ski-in/ski-out rooms for Lutsen Mountain Ski Area. It is the first property to be managed by Odyssey Development and after 25 years, remains a premier resort location for owners and renters alike. View more information about ownership opportunities at Caribou Highlands Lodge.
Frequently Asked Questions
How much can the owner use their vacation home and how do we book it?
When you purchase a “whole ownership” property, you may use your vacation home as much or as little as you want. Fractional owners also have the full use of their home during their purchased calendar weeks. An owner reserves the times they intend to stay and may release the remainder of their time into the rental program if they choose. If a last minute trip up north sounds fun and an owner has not reserved that time, we will do our best to move any reservations out of the owner’s unit and into another similar unit.
What is covered by the Homeowners Association dues?
Whole ownership association dues include management fees, electricity (common area/exterior), satellite TV, telephone, water & sewer, snow removal, lawn and landscape, exterior maintenance and repairs, property taxes and insurance on/for common areas and capital improvement escrow fund. Additional expenses are gas, interior maintenance, electricity (interior), property taxes on the building and other miscellaneous items specific to each resort.
Fractional ownership association dues include virtually every expense an owner incurs. It includes electricity, gas, interior and exterior maintenance (parts and labor), capital improvement escrow fund, escrow for interior replacement needs, exterior and interior insurance, annual deep cleaning, unit supplies (dishes, silverware etc.), management fees and property taxes.
How does Maintenance work?
Our resorts provide maintenance-free ownership. The majority of the maintenance is handled by our own trained staff, however, electrical, plumbing, and other specialized services are handled by local contractors.
How does Housekeeping work?
The on-site resort staff provides housekeeping services for your rental guests. This includes laundry, cabin cleaning, guest supplies and inspections. We also provide the same services for Owners and Guests of Owners during their stay for a fee outlined in the rental management agreement.
Do I receive a deed for property located in a resort?
Yes. With whole ownership, you own and hold the deed for the building and surrounding footprint. Then, as a member of the Homeowner’s Association, you also own an undivided interest in the common areas.
With fractional ownership, you purchase your vacation home in the same way you would as a whole owner, just with multiple owners. Each owner receives its own deeded interest and is then a member of the Shared Homeowners’ Association.
These are fee simple deeds just like your primary home. This property can be passed on to your children, or you can sell it just as you would any other piece of real estate.
What financing is available for whole and fractional ownership?
Financing for whole ownership is offered at most financial institutions. Fractional financing is provided locally and generally involves at least 15% down for qualified borrowers. For specific information, please contact Odyssey Real Estate Group.
How are the weeks organized for fractional shares?
Each fractional deed is for a specified number of weeks. Each time period offers equal time and is guaranteed a holiday once or twice a year depending on the number of weeks purchased. These calendars are set for 10+ years in advance.
Is fractional ownership common throughout the United States?
Fractional ownership is the fastest growing segment of the vacation home industry. As prices have risen dramatically in vacation areas, the idea of fractional ownership has spread and gained acceptance. According to Ragatz Associates, there were 254 fractional properties in North America in 2006. This growth has been fueled by the affordability of fractional ownership versus whole ownership and the reality that a typical family only uses their vacation home between 15-30 days a year.
Can I leave any personal belongings?
Yes, each owner receives a storage unit for your personal affects. As part of our concierge program we’re happy to prepare your home for you by placing those personal items throughout your cabin prior to your arrival.
Can I send friends and families up to the resort to use any of my weeks?
Sure, you are free to utilize the weeks that you own as you see fit. We encourage you to send family and friends and hope that you allow us to work with you to customize their visit.
How does the rental program work?
An owner decides what portion of their time they release into the rental program. We handle all advertising, reservations, cleaning, maintenance and guest services, and all rental income is split is 50/50 between owner and Odyssey Management.