Fractional Ownership can be a way for an owner of a North Tahoe-Truckee vacation home, or condominium, to retain ownership 
and use of that home and reduce overall holding costs. In today’s economy many people are looking for ways to reduce costs in all areas of their life and vacations homes can often end up on the list of items to be cut. The costs of owning any home can be a lot; mortgage, property tax, insurance, utilities, maintenance, etc. For someone who owns their primary residence and a North Tahoe or Truckee vacation home (which they probably only use 6 to 12 weeks per year), reducing their costs in that vacation home by 75% to 80% can allow them to keep using that property for years to come.
There are some concessions that have to be made;
- Sharing ownership does mean that the original owner no longer will have unlimited access to the home.
- Owners must leave the home clean and ready for other owners after each occupancy.
- A shared home cannot be personalized in the same way as a full ownership home.
- Storage of personal items such as sports equipment can be a problem unless there is adequate space for personal lockers.
Currently there are no lenders that will loan on Fractional Ownerships which means that buyers must pay cash unless a seller is willing to provide seller financing. It is also better if the seller does not have an existing mortgage but there are ways, in some cases, to sell shares in a property that does have a mortgage.
In 2006, prior to the economic downturn, the dollar volume of Fractional Ownership sales in the North Tahoe-Truckee market was 17% of total sales. Many of those sales were financed. Financing for Fractional Ownerships went away with the start of the downturn and that caused a large drop in both the number of sales and dollar volume. It also caused prices to drop, in some case substantially. That now seems to be changing. For the last two years the number of shares sold in this market have increased slightly each year.
In my opinion, I think we will see Fractional Ownership sales continue to increase in both number of shares sold and in dollar volume due to the following factors in our market; a large decrease in the number of distressed full ownership properties, our low levels of inventory of full ownership properties, and the desire of many vacation home owners to reduce their own costs.
Click here to read a “A House Divided” an April 2009 New York Times article on Fractional Ownership that is still very relevant and explains the concept in more detail.
For more information on available Fractional Ownerships in the North Tahoe-Truckee market click here.
If you would like to discuss this further, either as a seller of a vacation home or as a potential buyer please contact me, I have many years experience in this section of our market.
Cell: 530-913-6020
Email: info@GoSquaw.com
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