When it comes to buying a second home, you have several options. The default choice — buying a whole home — offers the most flexibility. However, the high costs of purchasing and maintaining an entire second home leave many buyers wondering if it’s worth it. The good news is there are other ownership paths to make your second home dream a reality. There are three paths to explore: timeshares, fractional ownership and co-ownership.
The right choice starts with the right planning
First things first: You’ll want to determine what matters the most to you. Second home paths offer varying levels of equity, flexibility and responsibility. Buyers should ask themselves: How much time will you spend in your home? Will you plan your stays ahead of time or be more spontaneous? How much time do you have to customize and maintain your home? There’s no one-size-fits-all approach. However, with the proper planning, you can purchase a second home that works with your schedule, your budget, and your time and willingness to maintain and manage it. Once you determine these parameters, you can consider the different ownership paths.
Fractional ownership, fractional benefits
Fractional ownership involves a buyer purchasing interest in a vacation condo or resort property with other buyers to share costs. Shares are more limited on a fractional compared to a timeshare, meaning buyers can have more access to the home.Fractional ownership works for buyers looking for deeded ownership, shared maintenance costs and longer vacations in resort properties.
The difference with co-ownership
A co-ownership model is a step above fractional ownership. With co-ownership, buyers own a share of a private, high-value home with a small number of other buyers. This path is a good option for clients looking for more accessibility and flexibility than a fractional ownership and more equity than a timeshare.Instead of DIYing their co-ownership plan, buyers can choose a fully managed LLC co-ownership model and enjoy true real estate ownership. LLC co-ownership has been around for years, but it can be hard to self-manage.
