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cwoods · Guest

Hi everyone,

I am interested in information and opinions on fractional ownership of recreational properties. What are the downsides and upsides? I looked at a quarter share on one of the Gulf Islands. 170,000 (ca) for 1/4 ownership in an 800 sq ft. quality built and fully furnished cottage located on a bluff with spectacular views. Near a ferry and marina and with and activity center and pool. Can this sort of thing be a good investment? Is appreciation likely? Thanks.

Cwoods (British Columbia, Canada)

nemmar · Site Admin

Cwoods,

In the USA we use the term "Timeshare" but in Canada you use the term "Fractional Ownership". The concept is the same in both cases just the name is different. An overall answer to your question is "Yes" fractional ownership deals can be good deals. But also, "No" if there are not good terms then it can be a bad deal. It's just like any other investment - some deals are good and some are bad. It all depends on the details and many factors of the location, the property, and the terms of the deal.

There is a site, one of many, that has information on fractional ownership in Canada. Here's some info and you can find that site at

http://www.csbcommunications.com/FractionalOwnership

The big issue is knowing the type of fractional to get involved with. You want ownership, not a lease. You want an equity ownership in a not-for-profit association that owns the development. You want to be able to sell your fractional or bequeath it. You want to be able to rent unused time or give it to friends or family.

Don't buy if the buildings are cheaply built -- you'll pay for upkeep in the long run. Be prepared to pay in the neighbourhood of $2,000 per year in maintenance and refurbishment fees -- any less and you've got to question whether the development has properly costed long-term maintenance and replacement.

How will the development be maintained? Are they cottages, town houses or apartments? What sort of frontage? Are there any amenities included, such as saunas, boats, etc.? How many weeks per year do you get? When are these weeks? Are pets allowed? Is smoking allowed in the units? How are they heated and cooled? Are there off-season activities?