Residence Club and Fractional FAQs

Owning real-estate in exotic locations is one of the most rewarding investments available. When considering the many vacation property options that are on the market, please take the time to keep the following questions in mind.

What size fraction are you offering?

The size of the fraction determines how much time you will have guaranteed on the property. Properties usually offer extra weeks on a “space available” basis, but this is unpredictable, so you will want to make sure the number of guaranteed weeks meets your minimum requirements. You could always consider buying two fractions, if one didn’t provide enough. Also keep in mind that if rental income is a part of your over-all plan, the more weeks you have during peak periods, the higher your potential income.

Are the weeks fixed or floating?

Some properties offer fixed weeks, where you get the same exact weeks each year, such as Christmas week. Others offer floating weeks, where your weeks change each year on a rotating schedule. For instance, if there are 6 owners, you would get Christmas week every 6th year. Usually, fixed weeks are more expensive than floating weeks, as parents like to secure their kids’ school vacation time. Some resorts offer a combination of both, so be sure you understand the usage calendar before you move forward.

Is the building completed yet?

If it is, be sure to take a thorough tour and look at more than one unit. If the building isn’t complete, they may have a model residence that you can view. Be sure to ask how similar the final product will be and what may change. If nothing else, visit the site where the building will be built to get an idea of the views, and examine the architectural plans. Ask about the developer as well. What other projects has he done? Does he have a website? Is he financially stable?

What percent of the total units have been sold to date?

This is important because there may be a chance to bargain for extras. Usually, you can negotiate the best price at the very beginning or very end of the sales cycle. For instance, if they are in “pre-sales” they often offer deals for “founding members”. If the project is mostly sold out, you may be able to negotiate pricing on one of the less-desirable units that is left.

How many price increases have you had?

Most completed projects will have a minimum of 12 price increases over an average 4-year life. Buying in when the property has had less than 8 price increases should enhance the value of your purchase. Resorts that are experiencing rapid price increases are fun to be a part of as they build you equity.

Exactly what does ownership include?

Be sure that you understand exactly what the purchase price includes. There is nothing more bothersome then to encounter "a la carte" fees that you were not aware of. For instance, if golf is a big reason for your purchase, find out exactly what is included for greens fees, cart fees and other services.

May I see a printed list of the fees?

As with all other forms of real estate there will be cost associated with ownership. It is very important that you ask for a list of the fees (such as housekeeping, maintenance, phone, etc.) and understand what each one is. Be sure to ask if your real estate taxes are included.