17th Sep, 2012

Benefits of Fractional Real Estate in Breckenridge vs.Whole Property

Investing in fractional Breckenridge Colorado real estate makes a lot of sense for vacation homebuyers. The benefits are so compelling that an increasing number of those inquiring about Breckenridge homes are asking about the options for fractional properties.

Grand Lodge at Peak 7 is one example of successful Breckenridge CO real estate that is sold turnkey in a fractional arrangement. The developer set up the legal structure, outfitted the property and manages the usage. Fractional real estate allows a buyer to purchase a share in a vacation home – in this instance,a unit in the Grand Lodge at Peak 7 – for only the time that they will use. The arrangement offers high quality, excellent maintenance and organization, and a much lower acquisition cost and the purchase of a whole property.

Fractional real estate in Breckenridge Colorado is also an excellent option for buyers who desire to vacation in several areas. This investor could purchase a property in say Florida, Arizona, or California as well as Summit County real estate. These various real estate markets allow for some diversification in the portfolio.

Instead of being responsible for the entire year of property taxes, insurance, utilities, and maintenance, the multiple owners of each unit share ongoing operating costs. They share the cost of maintaining and replacing furnishings and household goods. The contract for fractional property generally includes regular contributions for future maintenance. This is better than private ownership in that the funding is built ahead of any emergency maintenance necessities.

The fractional arrangement eliminates the costly property management services required by vacation homeowners who desire to rent out their properties during the times of the year that they will not be in the home. Likewise, fractional ownership eliminates the need to produce income from renters. Fractional owner does not need to market the property check-in tenants, etc.

So let’s get down to brass tacks. How can a buyer assess what’s more cost effective? Is a fractional arrangement was expensive for vacation properties or will the whole house turnout cheaper in the long run?

It is probably simplistic but easier to calculate the cost per night per square foot. If usage is allocated as a number of weeks or days, calculate by determining the annual cost of ownership and divided by the annual allotment of nights. Then divide the cost per night with the square footage of the property. Other factors to keep in mind are the amenities included in the purchase price, the amenities desired by the investor, and the cost of additional amenities.

For information about buying real estate in our mountain villages, call Barrie Stimson, Breckenridge Realtor® at (970) 390-2560.

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