Some wealthy nomads are opting to own fractions of multiple luxury homes. (Credit: iStock)
Rather than owning a single vacation property, some wealthy nomads are opting to own fractions of multiple luxury homes.
Sean Daly, for example, has a broad portfolio of vacation homes: one-tenth of a ski home in Vail, one-twelfth of an oceanfront retreat on Hawaii’s island of Kauai, and one-twelfth of a villa in Tuscany. Together, the properties cost more than $1 million, the Wall Street Journal reported.
“It works a lot better than full ownership — worrying about the upkeep, spending time dealing with problems rather than going up and enjoying it,” said Daly, a retired partner with a major accounting firm.
A fractional property is deeded real estate that can be sold, gifted or inherited, the report said. Residence clubs typically have higher price tags, but both are structured in the same way.
“Whether you are buying a Rolls-Royce or a Kia, it has the same seatbelt rules,” said Howard Nusbaum, president and CEO of the American Resort Development Association, a trade group.
While the arrangement has perks — owners pay annual maintenance fees to take care of housekeeping — there are also downsides. Specific travel dates are determined by a rotational system that varies year to year. Plus, once owners decide to sell, selling a fractional property can be a challenge.
“I wouldn’t do it as an investment strategy,” Daly said.
He bought one-eighth of a Timbers-managed condominium in Steamboat Springs in 2008 for $455,000. After deciding to build his own home there, the fractional property spent several years on the market. It sold for $375,000 in August. [WSJ] — Meenal Vamburkar
Source: The Real Deal Los Angeles