Caribbean Islands Realty
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Feb
28
     
Caribbean Fractional Ownership Is Greatly Impacting Resales Of Homes!
Filed Under (News, Real Estate, fractionals) by Jim Walberg on 28-02-2008

In the past six months the impact of fractional ownerships in the Caribbean is impacting the resale of homes and condos!

The smart developers saw it coming and they are building the product for the demand - fractional ownership of resort properties!  Up until just two years ago if 41-aruba-divi-resort.jpgyou were going to purchase a home, villa, or condo in the Caribbean, that would have been your choices.  In 2004 the Ritz Carlton at Red Hook, St. Thomas started seeing their gamble of selling just a portion of a residence start to pay off.  What is happening today is a BIG parade of world wide developers joining the game. And, what they are delivering to the Boomers, Brits, Europeans, Canadians, and Latin Americans are a multitude of choices of part time living in Paradise. ( Check out one of my past postings on fractional ownership.)

Just last week I was on St. Thomas speaking with one of the key real estate Brokers in the USVI.  He and41-westin-from-pool.jpg his company are the foundation of the resale market in the Virgin Islands. During our discussion I asked him some very pointed questions regarding the impact that fractional ownerships were having on the resale market for homes, villas and condos. He said it has been dramatic! Todays buyers for Caribbean properties are generally not going to be living here year-round.  They are typically on-island in the Caribbean about a month a year, and then they are either back to their home country, or they have another fractional ownership in some other part of the world - following the snow or the sun. 

The fractional ownership model allows for the developer to maximize the value of the property because they are selling it to the buyers for a premium price since there is a management company as part of the package, plus the developer has each villa or condo completely furnished. So, typically there are twelve owners of each property, each of them purchasing a month of the ownership. The buyers are willing to pay much more per square foot for a fractional property than they would for an individual home or condo because of the amenities and the management contract.  Just for example, I did some homework with my calculator and discovered that I could purchase a villa for about $350 per square foot.  Hang on to your hats…the developers of a fractional ownership resort are able to sell each unit for close to $1,000 per square foot, and the buyers are standing in line to buy them!

The appeal is no hassles of management, they arrive to a fully furnished home or condo, they have ownership that can be sold or transferred to their heirs as is the case for any other real estate they own, and the property is in an ultra-luxurious resort setting on the beach or the ski slopes of the most sought after locations in the world! Now do you see why the fractional ownerships are the hottest real estate opportunities happening right now! Remember, the blog posting I wrote about Aruba’s fractional developments that are waiting to be built numbered in the thousands!!! If you want more information about the many fractional ownership resort opportunities in the Caribbean, email me.  I will send you lots of information that will allow assist you in making a purchase decision. Until next time…your Caribbean lifestyle detective remains on duty.
  


Comments:
4 Comments posted on "Caribbean Fractional Ownership Is Greatly Impacting Resales Of Homes!"
Sherpa on March 1st, 2008 at 6:34 pm #

Interesting to hear about all the fractionals taking off in the Caribbean. Fractionals have been around in the US since the early 90s. They started in the ski resorts, where people didn’t want to buy a whole home which they would only use for a few weeks a year. Now they are in about 25 states all over the country.

Jim Walberg on March 4th, 2008 at 1:07 am #

You are correct about where Fractionals began. It has been an amazing experience to watch them take hold with the buyers who are following the sun. I have no doubt they will continue to expand in many spots of the world. Thanks for your comments.
Jim

Rob on February 9th, 2009 at 9:57 am #

FO’s are useless..basically nothing more than a timeshare on steroids.
sure you get to go to a nicer timeshare than most others ( Ritz), but in the end you’re still stuck with having to select weeks you want to go to your unit, and that almost always means that your first choice at a time slot is already taken.Guaranteed..
so yeah its great to own a ‘piece’ of the Ritz in say St Thomas, but going there for a week in August or late November, and maybe a week in July is not very appealing..chances are,you’ll ahve to reserve the ‘high-season’ time slots years in advance.
and everything you want to do to the place has to be agreed upon by 12 different people. And what if you decide to live in St Thomas, you can’t live there, as opposed to buying a condo or a home whewre you own 100% of the property and you don’t have to share anything with anyone else..
and if the property increases in value ( appreciation) you’ll get 100% of that profit and you can take equity loans against it, as opposed to an FO deal..
FO is really nothing more than a glorifed timeshare.

Jim Walberg on February 9th, 2009 at 11:14 am #

Hey Rob,
Thanks so much for your feedback on Fractional Ownership properties. Each of our customers have opinions as to what type of second home property works for them. Some buy a home, a townhome, a condo, and fractionals. It is one of the choices, and it is a choice many people are making in the Caribbean at this time. Again, thanks for logging on and expressing your experience with fractionals.

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