Real estate offers the investors to own a vacation home in 2 ways which can be either fractional ownership or timeshare depending on the distribution of actual equity. In fractional ownership, there are multiple buyers for the same property where the deed is split equally among each owner and equal access is given to all the purchasers. The rise and fall in the property value affects all the buyers who own a share.
Timeshare is usually preferred by the investors for vacation purpose which lasts only for stipulated period of time (for one or two weeks) where the title ownership remains with the owner and there is no need to pay mortgage for rest of the months. Moreover, there is not much rise or fall in the property value during the short span of time.
DC Fawcett reviews the benefits of having a fractional ownership and timeshare
- The purchaser holds a portion of asset where no cash is indulged
The entire property can be sold out when property value declines with no loss as well as sell a portion of the property when there is a hike.
- Helps during cost assistance as it can be sold as timeshare.
- From 4 to 13 weeks, buyers can have an ownership
- 3 to 5 bedroom units
Free from the responsibility of maintaining the property. The temporary buyer is not liable if any damage occurs during his stay.
- One or 2 bedroom unit
Dc Fawcett – How to buy or sell the property?
There are several property management companies who assist the investors in buying the land and schedule the time accordingly for living as per the number of buyers in the property.
If you are a fractional owner, then the share can be either sold as fractional ownership, or as timeshare.
The mentor, DC Fawcett states the complaints of timeshare ownership experienced by the investors
- Various costs are involved like maintenance, tax. Lifetime contracts where mortgage payments are added and there are limitations in booking.
- If taxes and fees aren’t paid it may result in foreclosure.
- Cannot deduct loss on tax returns
- Scheduling the period of stay is not easier as there would be several other buyers who would be in need of the resort at same time.
- Depreciation is faster and resale is not easier
- Same location to spend the vacation every year
DC Fawcett educates the investors to read the laws that have been enacted to protect the buyers from multiple timeshare scams which usually happen via timeshare resale brokers. He advises the investors to check the resort club and management company before booking.
The frequently occurring scams are
*Cold call scam:
Calls from resort club to pay for imaginary exit schemes
*Extortion timeshare scam:
Calls from unknown company and saying you are in debt.
Promising the consumers to get back all the money that he/she has been cheated so far.
To prevent from the kind of scams, the investors can join the DC Fawcett virtual real estate investing club to know more about vacation home.