By Nancy Mattia, CTW Features
Sharing the costs, responsibilities and perks of a vacation home
Americans have a passion for beautiful homes, with vacation homes holding their own special appeal. Like dessert, though, second homes are tempting, and not necessary.
Enter online platforms like SecondShare, Ember, and Pacaso, which offer second home ownership, but in more affordable slices.
“Fractional ownership” or “co-ownership” are the commonly used terms for this model. Each platform has its own unique approach to securing homes, providing ownership to multiple parties, managing the property and arranging owners’ stays, but the basic idea is that a home is purchased by the platform, which arranges legal ownership for several parties, from two to four or more.
Fractional ownership isn’t a new concept, says Jason Gamel, president and CEO of the American Resort Development Association {ARDA}. In the early 2000’s, fractional shares of condos and homes associated with resorts, which provided maintenance and other services to fractional residents, mushroomed in popularity, he notes.
While fractional ownership firms say they are distinct from a “timeshare,” the distinction can get blurry, says Gamel. “Most states have a legal definition of what a ‘timeshare,’ is,” he explains. Often, factors defining a time share include reoccurring occupancy rights, for at least one-seventh to one-eighth share of a year.
That means one-eighth of fractional ownership could be like a timeshare. But, most timeshare owners have just a week or two share, Gamel acknowledges.
Given this is a model many buyers are unfamiliar with, due diligence investigating details like the ease of scheduling visit times, what to expect in maintenance and upkeep charges, and how owners can sell their share, is advised.
Real estate agents are beginning to team with some of the platforms, and may introduce buyers to the concept. Josh Dotoli, of Compass Dotoli Group, Ft. Lauderdale, Fla., says he might show buyers who want a certain type of home but can’t afford the prices offerings from Pacaso.
Himself a co-owner of a home in the Florida Keys, Dotoli says he offers clients his personal experience when guiding them through the process. So, will you inquire about the possibilities of where co-ownership may take you?