Caribbean Islands Realty
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Jan
26
    
Filed Under (Beaches, fractionals, Good Times, Real Estate, Resorts) by Jim Walberg on 26-01-2008

30-aruba-boat-wild-side.jpgThe reason “Fractional” is in quotes is because of how property ownership works in Aruba.

Aruba is now listed as one of the “hot” islands for the further development of fractional resort and second home properties.  Hotels Magazine says that there are over 2,000 units already planned for Aruba!  The other “hot spot” is St. Maarten with Pelican Bay Marina as a specific example of what is happening on St. Maarten.  And, the fractional properties “market of tomorrow” is the Dominican Republic.

30-aruba-pelican-bay-marina.jpgAruba is just off the coast of Venezuela, at the bottom of the Caribbean islands chain.  Dutch is the still the official language since the island is still a part of the “Kingdom of the Netherlands”, with an American influence, too.  The official name is “Aruba and the Netherlands Antilles”.  The BIG draw to Aruba is the spectacular beaches that surround the island.  As you know, this is one of my top three criteria for the islands we visit – great beaches!

Speaking of Aruba beaches, you need to meet Gabriel when you are on-island.  He is the beach detective for Aruba.  He even has a website set up to introduce you to his latest discoveries and experiences related to the island’s beach scene – ArubaBeaches.com.  His site is invaluable for also finding things to do when on-island.  He is very accessible and will even answer your email inquiries and questions.30-aruba-divi-resort.jpg

Because Aruba is still connected to Europe, the major portion of the people buying up “fractionals” in Aruba are from England and mainland Europe. The beaches, the price of property and the currency are critical factors to Aruba being one of the true bargains for Europeans and Brits looking for a slice of Paradise. As for the Americans, their reasons for buying in Aruba are because it has the most consisten t weather in the Caribbean (generally no hurricanes) and the wonderful and friendly people.

I am doing more homework on the way Property ownership is structured. The 30-aruba-sunset-w-pelican.jpgeasiest way to explain it is that property purchased by non-citizens is done as a co-op partnership. So, be careful when the word “fractional” is used to market any properties in the Caribbean. The actual use of the property is structured as a true deeded fractional ownership. It is just a different legal ownership of the land. More to come, as I sort the details out further.

 For your first visit to Aruba you may want to stay at DIVI All-Inclusive resort.  It is an amazing place to stay as you are introduced to your unforgettable experience on Aruba.  While you are staying at DIVI you can check out Aruba Palace. This is a beautiful villa on the northern side of the island, just five minutes from the white coral sand beaches and world class golf resorts.  For $200,000US you can purchase an equal share of four weeks a year to enjoy the exclusively use of your villa. It is completely furnished and includes two Jaguars waiting for you in your own parking lot.  Aruba Paradise also has a management and rental program if there are times you are not visiting your villa.  This “fractional” villa has four bedrooms and four baths with a pool and fenced property. (While speaking with the owners I found there are only a few ownership shares left.)  As always, I am on the hunt for the best lifestyle and real estate opportunities in the Caribbean. Until next time….



Comments:
12 Comments posted on "Aruba Is The Target For A Huge Increase In “Fractional” Ownership Properties!"
Gabriel on January 27th, 2008 at 9:58 am #

Hi there Jim, thank you for the kind words. Indeed, I’m ready to answer any questions regarding accommodations or beaches.

On a slightly different note, what is your take on the effects the sub-prime crisis in the US might have on Caribbean realty in general?

I’m planning on writing a piece on this topic in the upcoming weeks.

Thanks again Jim.

Gabriel

admin on January 27th, 2008 at 10:28 am #

Hi Gabriel,
I am not an economist, but I do pay attention to what is happening with the world currency markets and how they impact Caribbean real estate purchases. The short answer to a complex question is that generally the American buyers for second and third homes in the world are not impacted by the current sub-prime mess, except for the impact it is having on the world stock markets. We expect to see a steady climb in Caribbean property sales over the next few years in two categories; 1) the American “baby boomers” whose age and money is maturing to the point of finding additional places to live during the year – the Caribbean being one of their top choices; and, 2) The Brits, Europeans and Canadians, who are buying any Caribbean properties tied to the U.S. dollar because their currency value allows them to make these purchases at huge discounts compared to the U.S. dollar. I hope this gets you started on your upcoming article. Contact me if you would like to discuss this further.
Jim

Scott on January 29th, 2008 at 8:50 pm #

Hi Jim…good post! Out of curiosity, do you happen to know what the resale market looks like for these $200,000 investments? I would think that with anything that is tied to land that there is a possibility for appreciation.

The 2 Jaguars in the garage also sounds rather appealing :)

-S

Jim Walberg on March 6th, 2008 at 10:00 pm #

Hi Scott,
Thanks for your question. Our experience is that there is a resale market for Fractionals, just like other deeded property. The appreciate is related to the islands where the fractional property is located. The price of the fractional property is also based on the most popular islands. Aruba is currently focused on this product as a key element to the growth of real estate ownership on this beautiful island. This product is a growing market that at the moment makes the most sense for those seeking a piece of paradise, but they don’t want to have a full ownership of a home, villa, or a townhome. I will continue to be a deligent detective in finding the best real estate opportunities in the Caribbean. Stay tuned…

Amy on March 25th, 2008 at 4:43 am #

This is a great article regarding properties in Aruba. I also keep on searching for properties and I find properties in Antigua quite appealing because of the picturesque landscape and friendly people. Moreover it is quite popular among Brits! I bought a villa in sporting icons resort here and got the best deal from http://www.elysiancaribbean.co.uk.

Jim Walberg on March 26th, 2008 at 10:44 am #

Hi Amy, thanks for sharing your experience in searching from real estate in Aruba and the Caribbean. I look forward to checking out the one that you selected at Sporting Icons Resort in Antiqua. I love that island!

Sophie Garrett on March 30th, 2008 at 8:40 am #

I’m interested to hear that Aruba has some fractional ownership properties in the pipeline. Do you know when these will start to be marketed and become available? My parents were there a couple of weeks ago and loved the island.

Fractional ownership is still a new concept in the US and Europe, but more and more people are looking at it seriously. I suspect that this is because fractional ownership satifies two usually conflicting desires: people’s desire for luxury and a wish not to waste resources (environmental concerns are making people think this way without even realising).

Anyone considering FO should look at resale values, and also the total value of the property versus the number of share x share value, to get a view on the likely increase in value of the share (or not).

I run the yours2share website which provides a place to find all the fractional offerings and also a place to advertise resales. There is also extensive guidance here.
http://www.yours2share.com

Jim Walberg on March 30th, 2008 at 11:30 am #

Hi Sophie, Thanks for your question about Aruba fractionals. Since you have a company that serves fractionals I am surprised you are unaware of the awesome frationals that are already on-line in Aruba. Also, just for your information, fractionals are a main stream product in the U.S. and Europe. In fact, this aspect of real estate generally started at the ski resorts of Colorado. You may want to look at your website and search for Aruba fractionals for your parents if they are truly interested. Check in anytime with me.

Sophie Garrett on March 30th, 2008 at 12:13 pm #

Hi Jim, Thanks for your reply. I work hard to keep track of all the fractional opportunities for property throughout the world as well as boats, cars, and anything else valuable. But it is a major task. So I’m sorry I wasn’t aware of what was hsppening in Aruba!
Can you post some links to the fractionals already on-line? I’ve had a look and find references to the Aruba Palace, but no information about the properties available. I also don’t think this can be all the 2000 units that I read about.
Regards Sophie

Jim Walberg on March 30th, 2008 at 12:36 pm #

You are correct. It is a daunting task to keep up with the real estate trends in the Caribbean. A source regarding the future of Aruba fractionals that may be of use is Hotels Magazine’s issue that focused on this topic. Here is their link.
http://www.hotelsmag.com/search/siteall?q=Aruba+Fractionals&x=19&y=11 Enjoy your day. Until next time.

Patrick LeGranche on March 7th, 2009 at 4:43 am #

Hi Jim,
Quite an interesting article but with somewhat very strange information:
- “property purchased by non-citizens is done as a co-op partnership”
What do you mean by that? Any property purchased in Aruba comes with a full deed to the owner, co-owners in case of FO. There is no need of any partnerships.

- “over 2,000 units already planned for Aruba”
The only offerings in Aruba come from Tierra del Sol and their Luxury FO which represents 50 units, and our company which offers Affordable FO villas.
Did you mistake FO with Timeshare which has been a long time success in Aruba, even if today there are no more new projects?

- “the major portion of the people buying up “fractionals” in Aruba are from England and mainland Europe”
The market is 90% US and Canadian. The remaining buyers are mostly Dutch (Aruba was part of the Netherland Antilles). Almost no Brits, Germans nor Frenchs.

Any time you need information about Aruba, do not hesitate to call us.
Regards,
Patrick

Jim Walberg on March 7th, 2009 at 8:48 am #

Hello Patrick,
Thank you for the corrections to my information posted in January 2008. I am a real fan of Aruba, and your information provides my readers corrections on the important details of ownership. I look forward to staying in touch.

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