On a trip to affluent ski town Steamboat Springs, Colo., in March, Dennis and Pamela Stearns discovered One Steamboat Place, a Timbers Resorts development that offers fractional ownership of luxury vacation properties. The couple, whose primary home is in Greensboro, N.C., were intrigued by the thought of a second home without the maintenance hassles. Fractional ownership with Timbers Resorts also enables the Stearns and their two young daughters to stay in luxury properties elsewhere. “We didn’t want to feel like we had to go to the same place all the time to justify having it,” says Ms. Stearns.
Fractional real-estate ownership differs somewhat from timeshares. It typically applies to high-end properties, and ownership is split among fewer people. Periods of annual usage are typically three to four weeks rather than one to two, and privileges may extend to more than one luxury property. Another draw is concierge-level services that a guest would receive at a luxury hotel.
Like deeded property owners, fractional owners can sell their stake, leave it in a will or put it in a trust. Fractional owners pay a share of property taxes as part of their annual dues, ranging from $8,100 to $21,000, depending on the property, which also covers their concierge services and utilities. Some borrowers are able to write off mortgage interest on their taxes. On the down side, owners who want to make changes to the property are limited.