Luxury Home Magazine

ractionals have transformed the vacation and second home ownership industry over recent years and are emerging as preferred alternatives to wholly-owned vacation or second home buyers. Fractionals attract consumers who can afford luxurious vacation or second homes but can’t justify the cost and inconvenience of whole ownership when their use of the property is usually limited to only several weeks per year. Consumers are also drawn to the extensive amenities, five-star hotel- like services, high-quality furnishings and finishes, desirable locations, exclusivity, and maintenance-free lifestyle offered by fractional projects. While fractionals offer vacation or second home benefits at a fraction of the cost. Fractional prices range from under $50,000 to several million dollars, depending upon the “size” of the fractional and the related accommodations, the location of the resort, and the degree of luxury provided. Here are a few basic ideas to keep in mind when thinking about Fractional ownership: A. Ownership Structure A fractional accommodation is often a condominium unit, a townhome, a single family home, or hotel suite. Some fractional projects participate in an exchange program, whereby purchasers have access to other properties of comparable quality located throughout the United States and abroad. Fractionals in Hawaii B. Purchase Price; Assessments and Dues Fractional purchasers pay a one-time purchase price and yearly assessments that cover the expenses of operating and maintaining the fractional project. C. Financing Although financing for the purchase of a deeded fractional interest isn’t nearly as prevalent as it is for the purchase of “whole” vacation homes, more and more lenders are treating the two purchases similarly for financing purposes. Many fractional purchasers tap a home equity line to finance their purchases or resort to other independent financing means. D. Resales You can resell your fractional just like you can sell a wholly-owned vacation or second home. E. Accommodations Fractional accommodations, typically contain one to four bedrooms and are frequently equipped with high-end furniture and finishes. The developers of fractional projects range from individual entrepreneurs, to established resort developers, to large, international hospitality companies such as Four Seasons, Ritz Carlton, and Hyatt. “Brand” developers bring credibility, exposure, greater marketing and sales resources, and the proven ability to deliver luxury hotel-like services and amenities. Editor’s Note: Fractional ownership programs can be a fantastic to way obtain Hawaiian property. Luxury Home Magazine™ recommends first consulting with a realtor and a financial officer to explore in detail the risks and benefits of these programs. Below are experts that can provide more information to help you make sound decisions. - LHM Old Republic and Title: 1.877.566.6671 Denise Drake, Realtor: 808.780.4259 Transpacific Mortgage: 808.540.5908 Don Eovino, Realtor: 808.735.3066 American Bancorp, Scott Farley: 808.479.8546