Welcome to Fractional Ownership.

Have a fractional ownership share of cottages, airplanes, yachts and more. This method takes the away the cost associated with of ownership, maintenance, compliance and security.

Fractional Ownership reduces up front and operating costs while at the same time keeping your investment secure and free from ever escalating costs. It has been shown that the average luxury item owner spends less than 10% of their time with or at the investment. Through fractional ownership one may purchase items that would not have been available in ones budget, enjoy the purchase for the same duration as if it were purchased individually and most importantly know that the value will be retained through good management established up front and with sufficient cash put into trust to cover all foreseeable future needs.

Although each property is handled differently a hypothetical break down of a cottage purchase follows. These properties run anywhere from $60,000 to $120,000 for a 10% share. We shall use $90,000 as an average or a total per cottage investment of $900,000.

To build and furnish a cottage in the 2,500 square foot range would cost approximately $450,000 including the cost of the property and grounds preparation. The first saving one sees in the cost of the actual property, as less waterfront footage per unit is required when developments are placed on a single piece of land. This equation leaves $450,000 to be put in trust to pay for the ongoing costs.

These costs, based on a 20 cottage development, would be but are not limited to:
Annual Security, Lawn and Roadway Maintenance. App. $300,000
Annual Cottage maintenance and furnishing replacement. App. $200,000
Annual Taxes. App. $100,000
Cleaning and Maid service. App. $100,000
Management Fees. App. $100,000
Incidental Costs, insurance, hydro, internet, heat etc. App. $100,000

Total Annual Cost: $900,000

From the cost of sales there would be $9,000,000 deposited in the trust fund. Hence as long as a return on investment was maintained at the 10% plus level, no other fractional owner contributions would be required. It is estimated that the developer under this equation will still be able to show a 15 to 20% after tax profit.

In the event that 10% was not maintained for every percentage point under 10% it would cost each owner $450 per year. With no return on investment then each 10% owner would be required to pay $4,500 per year making the decision to move to fractional ownership marginal.

It would be wise to have a current appraisal performed by a nuetral real estate company and get an accurate listing price if the cottage were split from the complex and sold as a separate item. That way you will be sure that you are making a fair market purchase.