Estimated read time: 4-5 minutes
If you've always dreamed about owning a vacation home but can't afford a single-title property and want to skip the hassle of a timeshare, co-ownership is certainly worth exploring.
Very few people would balk at the opportunity to slip away to a second home in a beautiful locale that offered a reprieve from the daily grind of life. That said, very few people have the funds to own a second home these days. But don't let go of those vacation home daydreams just yet. There's another way to make them come true.
The answer is co-ownership — or fractional ownership, as it's sometimes called. Think of it this way: Instead of owning a second home by yourself, you share it with several other owners, thus reducing the cost. And in case the word "share" makes you think of "timeshare," you should know that there's a big difference between the two terms.
Here's a breakdown of co-ownership, how it differs from timesharing and why it very well might be your ticket to an affordable vacation home you love.
Co-ownership vs. timeshares
When you purchase a timeshare, you're purchasing a certain amount of time on a property or collection of properties per year. The property's title is under someone else's name and the amount of time you get there depends on the owner and on the other timeshare partners. You have to request that time and are often relegated to just two weeks out of the year.
On the other hand, co-ownership gives you much more control over your use of the property because you own an equal portion of the property title along with the other co-owners. Depending on the number of co-owners and the sharing system you agree to, you could be enjoying five or more weeks a year at the property.
Benefits of co-ownership
Co-ownership may be a more attractive option than timesharing for several reasons. As mentioned above, you'll likely get more time to spend in your vacation home than you would with a timeshare. And because each owner owns an equal part of the title, no one bears the burden of property taxes, management and maintenance on their own. Spreading these responsibilities out over several owners makes things much more affordable.
You also have more control in a co-ownership situation and may even stand to build some equity if the property's value increases.
"Each owner has a direct share in the property, and the value of that share changes as the asset appreciates or depreciates," Rae Hartley Beck writes for Bankrate. "Furthermore, each fractional owner has a say in what happens to the asset and how it is used."
In an article for LinkedIn, Greg Rankin outlines yet another benefit of co-owned vacation homes.
"Co-owners bring an owner's mentality to the property and are invested in the maintenance and upkeep of the property and the community," Rankin writes. "Unlike short-term renters, co-owners have an interest in what happens to the property resulting in less damage and surprises."
Who manages the property?
The easiest way to manage your co-owned vacation home is through a management company. In addition to cleaning and maintaining the property, the company is in charge of vetting potential owners, which makes the buying and selling process much easier. Handing off these responsibilities to a management company means that your time is freed up to relax and enjoy your vacation property.
Can you sell your shares?
Since you're a legal co-owner of the vacation home, you can sell your share at any time. The good news is that this process is much easier than a traditional real estate sale. Rather than selling an entire home, your co-ownership group simply has to make an adjustment to the ownership agreement. And don't forget — your management company is there to handle all the paperwork and vet those potential owners.
Your second home is waiting
The team at Nelson Family Estates believes that everyone should have access to the shared ownership real estate opportunities they deserve. With luxurious waterfront condos located in California and Hawaii that are fully furnished and professionally managed, Nelson Family Estates is your go-to choice for vacation homes.
Get in touch with Nelson Family Estates today to learn more about their co-ownership opportunities in Oahu, Hawaii and Oceanside, California. That dream home is waiting for you!
