FAQs - Fractional Ownership
How does private fractional ownership differ from other forms of shared ownership such as traditional fractional ownership or timeshare?
Worry-free ownership, comprehensive management and shared private usage benefits are only some of the many advantages that allow fractional ownership to differentiate itself from timeshares and other generic fractional ownership offerings. With the private fractional ownership, you enjoy the privacy of a small investment group, typically two to five partners, which creates a level of intimacy, flexibility, and assured access to the home unattainable in other offerings. Homes are carefully selected in areas that are otherwise inaccessible to shared ownership groups. Private fractional ownership is an intelligent investment decision that grants you the security of enjoying strong appreciation on your property. Because of the sponsor’s knowledge and skill in purchasing real estate and establishing successful investment partnerships, fractional ownership produces remarkable value for our clients. We are aware that this opportunity is not right for everyone. Private residence clubs, generic fractional home ownership, and other vacation offerings work well for some, but for those who value privacy, smart investment decisions, and the intimate feeling of owning your own home, fractional ownership offers the best fit.
How do I reserve time? What happens to unused weeks?
Each owner can use their time, share it with loved ones or put it in the rental pool. Your property will also be part of an exclusive network of exclusive privately-owned vacation properties around the world. You will also have the option of trading weeks in your home in the Turks and Caicos for time in the other properties in the network. The sponsor handles all of the logistics. Time that is not being used personally by the owners is pooled and rented out through elite vacation rental agents who specialize in luxury property in the Turks and Caicos. The revenue generated is allocated fairly to each owner, based on the number of weeks contributed to the pool. The income is then used to offset annual mortgage and operating expenses.
Are owners assigned the same time slot each year? If not, how is time allocated?
No, selection of personal use is fair, reasonable and flexible. For most owners, access to the home on desired dates will be as satisfying as if they owned the entire home themselves. A yearly calendar is circulated to the owners to select which weeks they would like. In the event of a tie, the sponsor works with the owners or implements a rotating tie breaker system for resolution. Unreserved weeks from the initial calendar process will go into the rental pool. Owners always have the option of requesting additional weeks for themselves, friends or family. Owners also have the ability to change their requested dates.
How are maintenance decisions made for the property and how are those expenses determined?
Upon purchase, all of the property’s furnishings, luxuries and amenities are in place. Moving forward, the objective is to maintain the quality of the property, both for the owners’ satisfaction and to maintain the highest level of rental income potential on the property. Any ongoing maintenance decisions are designed to keep standards high and costs low.
Who is the sponsor of private fractional ownership? How can I be confident in their management capability?
The sponsor of this offering operates an extensive list of private fractionally owned properties in the United States, Caribbean, Mexico, and Europe. The sponsor is an affiliate of a Minnesota based diversified real estate development and property management firm with over thirty-eight years of experience in the business. The sponsor’s parent company has developed, owned and operated more than 8700 residential housing units in the upper Midwest.
Are taxes, management, furniture and other costs included in the total share price? Are there any hidden fees?
The total share price includes all closing costs, legal and financial costs, furnishing and renovation (if applicable), and preparing the property for the rental market. Each home is funded with a $50,000-75,000 operating reserve which is also part of the purchase and inures to the benefit of the owners. There are no additional fees or taxes for the investor.
Can I sell my share of property at any time? If I want to sell my share, can it be done privately, or must I sell it through you?
Each owner is fully vested for his or her share of ownership and is free to sell it privately at any time. The solvency and suitability of the new owner will be evaluated so that when a sale occurs the previous owner can be released from all future obligations. Existing owners will be offered the opportunity to purchase the shares that an existing co-owner is looking to sell. The sponsor does not often buy the shares back from individual owners; however, through their database of interested shareholders-to-be, they are glad to assist you in locating a willing buyer.
What is the expected sell date for the property? Is this set in stone, or can a different decision be made by the owners to sell earlier or later?
Each owner should be prepared to own the property for 5-10 years, after which time the property will be sold. Having the ability to sell the entire home after the sell date is a huge advantage this form of fractional ownership has over traditional shared ownership options. Certain variable factors such as market conditions, rental income or other unforeseen factors, may cause the owners to collectively decide to sell the property early, or hold the property longer. Details of any such decision-making process are spelled out clearly in the management documents.
Are the documents governing the property available for review?
All the structural and financial documents of fractional ownership are accessible for your review prior to making any commitment. The process involves entering into a dialogue with the sponsor.