CHAPTER 10: Income Producing Residence Club Membership in Vacation Rental Property

CHAPTER 10

Income Pr oducing Residence Club Membership in Vacation Rental Property

THE LAST TOPIC I WANT TO COVER in this book is perhaps the most exciting one of all for today’s VRP owner. It’s an entirely new product off ering, an innovation that I’m excited to see developing at the forefront of the vacation property industry. Let’s get into it.

First, some background: people tend to confuse fractional property ownership, timeshare, and other vacation rental property products. Fractional investment actually is investment in a hard asset and has been available on the VRP market for years. Here is how it works: you take a vacation home and divide it into fractions and have multiple owners. Everyone has to schedule how they will use the home every year. Or, they can take their weeks and rent them out to others and make money. It provides you with a fraction of home ownership backed by a hard asset.

I am much more positive on fractional ownership as a concept than on timeshare, but it does still have some issues. If the developer is not trying to price-gouge on converting a single home to a fractional model, and is reasonable about the profi t that they are pulling out, fractional ownership situations are a very potent use of the best of everything. You have a hard asset that does appreciate as the value of the home appreciates. It can be rented out for income, and it can be used.