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.