Veteran Builder: Fractional is the Future

From FractionalLife.com:  http://www.fractionallife.com/news_fractional_is_the_future_says_us_developer735.asp

Established US developer Richard Stockett is embracing the fractional ownership concept with zeal.

A veteran builder who has developed more than two dozen residential communities, Stockett, 50, changed his plans for the 48 townhouses he is building in Beaufort, North Carolina when the recession hit and the market for second homes hit the buffers.

He originally intended to sell the homes at MainSail of Beaufort on a whole ownership basis but after delaying the project for a year, Stockett adopted a fractional ownership model that he says makes perfect sense in a world where rising real estate values are no longer a given.

Stockett is selling one-tenth shares in the 48 townhouses he plans to build on eight acres he purchased for $3.7million in 2007. The average price of a share in each townhouse will be $75,000, though Stockett is selling the first 20 for $59,900. In addition to the share price, owners will pay $282 a month for year-round management and maintenance of the development. Fractional owners in MainSail are guaranteed a minimum of five weeks of vacation time and the schedule rotates annually so that every owner gets some prime vacation times.

Newsobserver.com says fractional ownership became increasingly popular before the real estate bubble burst in the United States because it offered people a way into markets where prices had reached astronomical levels. Stockett thinks the structure makes even more sense in a post-bubble world where real estate no longer seems a surefire investment.

“What you’re down to now is the pure cost of what does it cost me to stay in my vacation home each night,” he said. “I do believe this is the way to own vacation properties in the future.”