Purchasing A Fractional Property: Final Questions To Ask

Part Three In The Series On Purchasing A Fractional Vacation Property

Now that you understand the basics of fractional ownership and how to finance your property, it’s time to ask yourself some final questions. The answers to the following questions will help you make your decision on heading to the sales table.

Practicality of Your Purchase:
Will you be satisfied visiting the same location year after year? If not, you should look for a company that offers a points program allowing you to buy a fraction equal to a certain number of points. You can use these points to vacation at different properties in multiple locations instead of using your weeks at one location. If you do decide to utilize the points program, you’ll want to find out if the company has enough units to satisfy demand. Will you have trouble getting the week and location you want? My family has been visiting Myrtle Beach, SC for the past 23 years. In hindsight, it would have been smart to purchase a fraction at a condo in Myrtle Beach, no need for the points system. Owning would certainly eliminate the hassle of locating a rental property every year.

To Invest or Not to Invest:
Are you buying as an investment? It is important not to consider the purchase of a fractional vacation property a financial investment. Instead, consider the purchase an investment in your future vacations. As you’ve read, resales are usually are difficult. It is common that local real estate agents will not want to include a fractional property in their listings, and many people reselling face competition from the original seller. It’s a smart idea to ask your company what kind of options they have for reselling in-house.

Fees, Costs and Hidden Charges:
What are your annual fees? Annual maintenance fees can be $500 or more. Fees can rise at rates that compare to or surpass inflation, it’s important to ask if there’s a fee cap for your plan. Unfortunately, the fees must be paid whether or not you use the unit. To gauge the norm, compare your total timeshare costs with rental costs for similar accommodations and amenities for the same time and in the same location.

Exchange Programs Does the company offer exchange programs? Exchange programs allow you to arrange trades with properties in different locations around the world. Sometimes the exchange will entail an additional fee. It’s important to understand the limitations and additional costs on exchange opportunities. Two names to look for are Resort Condominiums International (RCI) www.rci.com and Interval International (IntervalWorld) www.intervalworld.com. Membership with these exchange companies is limited to owners at the properties within their network. Your opportunity to exchange within either of these networks depends on your company’s relationship with them. Both RCI and Interval International provide their members, fractional vacation owners from around the world, with a variety of exchange services. Membership will come along with your initial purchase.

Keep in mind these two final tips. Be wary of persistent sales associates! They put the pressure on. And, have a lawyer review your contract before you sign on the dotted line. Sometimes we might think we understand the fine print, but it’s better to be sure.

Now that you are equipped with the appropriate information, you are ready to make your decision and either choose to or not to purchase a fractional vacation property. Owning is not for everyone, and it’s definitely better to realize it’s not for you before you make the purchase. Be sure to refer back to www.vacationownership.com and www.arda.com for updated information on the state of the industry and company reviews. Good luck!