Expanding on the concept, some families have elected to own more than one fractional home. For example, owning at a location focused on summer use and at a winter location. Or, owning a fractional within driving distance for long-weekend use and also owning a fractional in a “fly-to” destination. Owning in more than one location offers diversity in use and scenery and STILL costs much less than owning a 52-week vacation home.

Through the use of exchange, your second home becomes your 3rd home… or 4th home. If you bought your second home (or third home) for its location and quality, there’s an excellent chance that another vacation homeowner will enjoy your home as much as you do and exchange is an excellent way of expanding your horizons by using the keys to your home to unlock doors worldwide.

By exchanging, you’ll avoid the hassles of finding a rental and dealing with high rental rates and damage deposits. You’ll exchange with a family that a) owns a vacation home and b) will treat your home with the same respect that they treat their home. You’ll often exchange for a home that’s a second home and not just a scantily-stocked vacation rental.  Calphalon in the kitchen, luxury towels, bikes in the garage, toys for the kids, a collection of movies and sometimes even a vehicle in the garage are often the hallmarks of a true exchange home. Added to that, your exchange family will often share their knowledge of the area so you’ll have a good idea of the best activities and restaurants.

What’s not to like about fractional? Probably one of the most important parts of your decision is the use calendar, sometimes called the rotation. Be sure to carefully consider the rotation and if impromptu use is allowed. You’ll also want to consider if you’ll be able (or want) to rent your unused time. Price is also a consideration, as fractional often costs a slight premium to whole ownership (ie, four quarter shares as sold for more than a full ownership would cost). You’ll also want to consider the management of the fractional — will your visit be headache free (full management) and what is the cost associated with management.

In closing, fractional is an incredible option in vacation home ownership. It’s a concept that began in the 1980s at Lake Tahoe, pioneered by Gordon McMahon (who continues to develop and sell fractional homes on the Oregon Coast) and has spread worldwide.

As one fractional developer puts it: “Lifestyles of the smart and practical” is an excellent description of fractional ownership.

Vail Resorts markets their five ski areas, six golf courses and twenty hotels to the affluent consumer and their shift of marketing is an affirmation of the importance of the internet in reaching the affluent consumer.

http://link.brightcove.com/services/link/bcpid1370868150/bctid52412902001

You’re seriously considering buying a second home or vacation home. What are your options? Is whole ownership the right choice? What about fractional or shared ownership? What’s more important to you – investment or enjoyment? This report answers these questions and more.

A second home is something many aspire to own and enjoy. You’re not alone. In fact, people are buying second homes like never before. Second homes tend to be held for seasonal and occasional use or whose usual occupants live elsewhere.

The expansion of second home growth has had two driving forces behind it: increased wealth and favorable demographics. With tax laws that benefited the transfer of wealth, the stock market boom in the 1990’s and renewed house price appreciation, average household net worth has risen dramatically. These demographic changes coupled with the recent languishing stock market have intensified second home demand and contributed coincidently to the extreme rise in prices within destination resort areas. Second home purchases are most commonly made by middle aged heads of households in their prime earning years.

In 2004, the second home industry in North America achieved record sales volumes. A total of 2.82 million second homes were sold in the U.S., up 16.3% from 2.42 million sales in 2003. This growth trend is attributed to several factors:

The US economy recovered from a deep recession.

• Cash in money markets languished with the lowest interest rates in decades.
• Confidence in the stock market remained and continues to remain low with consumers seeking out alternative investment opportunities.
• Consumers in the US and Canada saw second home real estate as a safe haven for investment appreciation with the opportunity to also enjoy the use of their new asset.
• Second homes also provide investment diversification, which has become a critical concern among consumers since the stock market crash in 2000 and 2001.

New Ownership Options Available to Meet New Market Demands

In response to growing demand, the resort industry has undergone substantial change in the last five years. In order to broaden market appeal, developers have crafted new second home real estate products to better respond to people’s needs and desires. The most recent innovations in the second home industry are the introduction and rapidly increasing popularity of luxury fractional real estate and the condominium hotel – two of the fastest growing segments of the real estate industry today.

Fractional Real Estate and Condominium Hotels are primarily purchased for lifestyle enhancements. The variations between these products tend to be in how the owners plan to use their residences and what they hope to gain from their ownership. To better understand these differences it is important to note the two primary motivations for owning a second home – as an investment and enjoyment from use of the residence.

Similar to whole ownership purchases, fractional and condo hotel owners are granted ownership by fee simple deed with title insurance. Since Fractional Real Estate and Condominium Hotels are backed by deed and title, these purchases are considered equity based investments as opposed to the non equity based multi site destination clubs also popular in today’s market. And, just as you can with a primary dwelling, the deeded fraction or condo hotel real estate may be resold or bequeathed.

Fractional Ownership

Fractionals are very upscale fully furnished second home properties usually located within renowned destination resort areas or select urban settings where cultural, dining and shopping experiences are extraordinary. More important to the consumer is that resort fractional projects are being located within destinations that have been family favorites for generations. These residence programs normally include superior resort services such as concierge, valet parking and personal gourmet chef services for in home dining, as well as the use of first class quality amenities and a variety of recreational activities.

Common settings for fractional properties are ski and golf resorts and beach communities. Popular destinations include Aspen and Telluride in Colorado as well as the Caribbean. “Fractionals are typically found in resort areas where prices for second homes are very high and/or there is a scarcity of available real estate,” says Richard Ragatz, president of Ragatz Associates, a hospitality market research and consulting firm based in Eugene, Oregon.

Carl Berry, CEO of Scottsdale based Star Resort Group, notes that the luxury fractional or private residence club concept has become attractive because property values in popular resort areas has skyrocketed out of reach of all but the wealthiest buyers.

For example, Mr. Berry notes that $1 million now buys a tear down cabin in Aspen, Colorado, whereas a fractional there costs $200,000 to $500,000, “which is chicken feed compared to what these properties are going for.” Nowadays, $200,000 will buy a piece of a $1.5 million property, according to Ragatz, who notes that this concept has been around a long time. “People have been investing in second homes with relatives and friends for years, but divided ownership property was never a true product until recently.”

I like to emphasize that the popularity of the second home fractional is that it makes sense to purchasers who simply could not justify the purchase that they might only use for a few weeks out of each year. With a fractional, owners have the asset and all the advantages of second home ownership without the cost or year round maintenance obligations. Professional management relieves owners of the worry and anguish that often accompanies second home ownership. When coupled with superior hospitality service levels, the fractional purchase is an exciting and sensible alternative in the second home marketplace. Fractional choices are broadening as developers continue to design programs that truly allow owners to use their second home as they prefer at a fraction of the cost.

What Types of Fractional Ownership Are Available?

There are several different types of fractionals that serve divergent interests. The most popular categories include Traditional Fractions and Private Residence Clubs.

Traditional Fractional

This original fractional format was first formulated in the 1980’s to formalize the sharing of a single family home within a destination resort area. Traditional fractions now involve condominiums and attached townhouses as well as detached single family homes. These Traditional Fractionals are usually sold in one fourth interests, also termed Quarter shares. Quarter share owners receive one week of use each month for a total of 13 weeks per year. Variations of the Traditional Fractional include: Fifth shares with a total of 10 weeks per year and assignment of use every fifth week, and; Sixth shares with 8 weeks of use per year and allocation of time every sixth week.

Within each traditional fractional format, the weeks are assigned through a calendar that rotates to distribute the most desirable times of the seasons in a fair and equitable manner. The owner may either use or gift their weeks, or they can place their unused time in a rental program and split the revenue with the property manager after costs. Quality of the residence and furnishings is in the 3 to 4 star ranges. Service levels are at the 3 star level, if included in the program offering.

Private Residence Club (PRC)

A Private Residence Club (PRC) is designed to meet the needs of the same affluent buyer that would normally consider purchasing a luxury wholly owned second home. The purchase decision is primarily based on the buyer’s motivation to enjoy the residence and the resort area, although potential value appreciation is a factor.

Affluent purchasers recognize they have limited leisure time and are looking for real estate that is price proportionate to actual use. The Private Residence Club ownership model follows a “pay for what you need and want” philosophy in an intimate, exclusive community together with highly personalized service and a wide range of amenities. As in the Traditional Fractional, owners purchase a share or “fraction” of a Private Residence Club home. They receive a deed with title insurance.

Private Residence Clubs comprise a high end luxury product sold on a one seventh (1/7) to one thirteenth (1/13) share basis. Quality of the residence and furnishings is in the 4 star to 5 star ranges. Service levels are superior with every need or request by an owner accommodated by an attentive staff.

As pioneered by principals of Star Resort Group, the defining quality of the Private Residence Club is in the owners’ ability to access their time in a flexible manner and literally as often as they want, similar to a golf country club and subject to the project’s Reservations Policies and Procedures.

Dave Hanna, President of Star Hospitality and a member of the first PRC development team explains, “In the Private Residence Club program, the owner’s use of the residence is on his schedule and not controlled by a calendar. Generally, ownerships are granted a set amount of time, termed ‘Pre planned Vacations’, to guarantee each owner access to their residence during peak seasonal times. In designing a particular use plan, we consider the length of the peak season and set a ratio of owners to each home that allows enough flexibility so owners can be assured of securing the times that they want each year. Spontaneous visits by owners are accommodated through a ‘Space Available’ reservation program that allows for use as little as one night at a time and up to seven nights per reservation. Some owners may use the program less in certain years, making more time available at the resort for the other owners.”

Carl Berry adds a note on hospitality service levels: “Certain Private Residence Club projects prefer to promote their program with “5 star service” levels. When compared to the rating system utilized by the hospitality industry for luxury hotels, residence clubs that do not provide fine dining alternatives, butler service and other requisites that earn the 5 star rating are at 4 to 4.5 star levels. That is not to say that the service isn’t excellent, for it is. It’s just not 5 star by hospitality industry definitions. Owners at Star Resort Group projects appreciate the tradeoffs between having a 24 hour butler staff versus having to pay for that convenience in their annual fees.”

PRCs are seldom rented, since the owners generally prefer to keep unused time available for the owners while maintaining exclusivity. The Homeowners Association supports their thinking by not facilitating or encouraging rentals. Should owners decide to rent any of their guaranteed weeks to friends or associates, the renters are treated as the owner’s unaccompanied guests.

Condo Hotels

Statistics show that the market for homes with rental income potential is nearly twice the size of the market for vacation homes that are seldom rented. However, both markets are growing rapidly in double digits. As expected, the typical buyer is at least partially motivated by investment and rental income and may be younger and less affluent that the luxury whole ownership second home buyer.

A Condo Hotel unit is a condominium sold on a whole ownership basis with the intent of the owner using some of the time when they wish, while placing the balance of their unused or unscheduled time into a hotel rental program. An operating hotel with attendant services is critical for this program to be successful. The appeal of a condo hotel ownership to prospective buyers is that there may be an opportunity for rental income to cover yearly operating costs. Strict rules apply toward representation of the condo hotel product as an investment. It is first and foremost a real estate product predicated on the owner’s planned use.

Although most condo hotels are sold as whole ownership, some condo hotel regimes have structured a hybrid fractional overlay model into the mix of products in order to reduce the price point and diversify the market. Aside from the prevalent whole ownership condo hotel model, traditional quarter shares or fifth shares tend to be the most popular hybrid within the condo hotel platform.

Whole Ownership Second Home Options

For those who choose to use their resort residence for longer periods of time, or are inflexible in their use times, or for those who simply prefer not to share and are willing to pay the price, whole ownership of a second home is the only acceptable format.

You’re One Step Closer to Your New Home

Now that you’re armed with all the facts, the next step is to start shopping for your new second home. And now that you know all about your fractional ownership options and all of the benefits of only paying for what you need, you just might find yourself owning your dream home sooner than you thought possible.

For more information on fractional ownership in private residence clubs and on condo hotels, including listings and photos of available properties, visit the Star Resort Group website at www.starresortgroup.com

About the Author:

John R. Kazanjian is the Managing Director for RTK Resort Group. He is concurrently serving as Project Director for Piazza San Lorenzo, a luxury high-lifestyle mixed-use community on San Antonio’s famed Riverwalk. Mr. Kazanjian most recently served as Executive Vice President of Star Resort Group, was a co-founder of The World’s Finest Resorts and concurrently served as CEO of Resort Development & Advisors.  http://www.rtkresorts.com/RTK%20Principals%20Bios-Kazanjian.htm

By Andrew Cohan, Consulting & Valuation, Shared Ownership Services
HVS (major resort consulting company)

http://www.hvs.com/Library/Article.aspx?aid=4163

Fractional ownership has it roots in the Lake Tahoe basin, where individual homes were developed and then sold to separate families for shared use according to a use rotation schedule.  Over time, fractional evolved into luxury resort developments with many, many properties (typically high-end condos) and many hundreds of owners.

We’re owners in a fractional resort (Villa La Estancia, Cabo San Lucas) and really like the concept. We arrive to our second home knowing the management company has taken care of every detail — and most importantly, all maintenance. We depart relaxed, knowing when we lock the door, the property will be taken care of until we return.

Fractional is just a great concept when compared to ownership of a standalone vacation home, where part of your vacation time is spent dealing with maintenance issues and subcontractors.

Fractional is a simple concept: no headaches and buy only the amount of time that you need for vacation.  Rather than buying a home near the beach, with fractional you can buy a home on the beach. Here’s an excellent example: The Shores @ The Ocean.  From their website:

“Why buy 100% of a vacation home when studies show most people only spend an average of seven weeks per year at a second home? Instead, for prices ranging from $200,000 – 400,000, you can own a fractional deeded interest in your own premier oceanfront vacation home. This ownership entitles you to all of the benefits of owning a turn-key second home, without the hassles. The Shores @ The Ocean takes care of all the chores and owner requests. You just enjoy your vacations.”

We’ve visited their properties and they are absolutely stunning and well appointed, right down to the convertible in the garage for owner use. For the price of a mediocre home, fractional owners at The Shores own a spectacular home located in a stunning setting.

Fractional ownership is proven vacation home ownership model that just makes sense will only grow increasingly popular as a method of vacation home ownership.

Things to look for when considering fractional ownership:

• What is the rotation schedule for use?
• Can you easily exchange use with other owners?
• Can you exchange use for other properties worldwide?
• Location, location, location. The same things you’d look for in a wholly-owned vacation home (except with fractional, you can likely afford “more” home in a better location).
• What type of property management is there?
• What are the dues? Are they sufficient to cover maintenance (both scheduled and unscheduled) and pay for professional property management?
• What are the amenities?
• Are you allowed to rent your unused weeks?

Fractional ownership is deeded ownership and can be resold using traditional channels. As fractional ownership gains in popularity, expect to see more Realtors gain knowledge of the value of fractional and fractional listings to become more common.

“Whole” ownership of a vacation home is a romantic notion, but not as practical (or enjoyable) as fractional ownership.

In light of the worldwide economic slump (especially acute in real estate), many investors are questioning the wisdom of borrowing to purchase real estate. Traditionally, the purchase of a typical vacation home is funded with a 20% (or, in another way of saying it, 1/5th) down payment and the balance borrowed. Fractional ownership offers an alternative: why not put that 1/5th (or less) into straight ownership and not have a monthly loan payment to contend with?

Why buy 100% of a home just to use it 10% of the time?

With that in mind, we know of several fractional owners that own more than one fractional. Vacation here, vacation there…  With FractionalExchange.com, vacation everywhere!

Exchanging a primary (or full-time) home is sometimes a challenge.

First and foremost, unless you happen to live in a desirable area, you aren’t likely to receive many exchange offers. To add to the challenge, the home exchange likely has to be simultaneous, as both families occupy their primary homes year-round.

To top it off, let’s face it, our houses aren’t as organized in daily use as we’d like them to be and for our family, we’d embark on a cleaning/declutter campaign for a few weeks prior to the exchange to ensure that our home was clean and inviting for our exchange family (the cleaning/declutter isn’t necessarily a bad thing though!).

Pets are another issue to contend with.

In 2005, we purchased our second home in Cabo San Lucas, Mexico. We bought the home sight-unseen with another family (they had seen it), solely due to the exchange potential.

The home qualified for trade within an exchange company known as The World’s Finest Resorts and that greatly appealed to us.  Also, Cabo’s ten-month rental “season” was attractive as well, as we would have a steady income stream from renting our beachfront property.

It took us almost a year until we visited our place, but we’d already exchanged it with TWFR (which later was purchased by RCI and became known as The Registry Collection) for a couple of stays at The Four Seasons Aviara in Carlsbad.

Exchanging was in our blood and we continued to exchange for places as diverse as Aspen, Lake Tahoe, San Diego and Malibu.

Back to our point however: exchanging a vacation home is a very simple affair and much, much easier than exchanging a primary home:

• Vacation homes are typically located in areas of high demand and this means they’ll attract numerous attractive exchange offers
• The exchange need not be simultaneous
• The second home is typically clean and uncluttered, meaning no “preparation” prior to exchange
• Personal effects are minimal and don’t require sequestering
• Maid services are typically already arranged (as most homes serve as rentals)
• Pets aren’t an issue
• Typically, vacation homes are served by a property manager that can cater to the incoming exchange family. This is especially valid at fractional resorts.

If you own a second home, exchanging is a terrific option for you.  Having an exchange family occupy your second home is no different than renting it, but rather than accepting payment in currency, you’re taking payment in kind.

However, exchange is better than renting, as your home is occupied by a family that already owns a second home and they’ll treat YOUR property the way they’d expect YOU to treat their property.

Why rent? Exchange! You already own a second home, so why rent when you want to vacation in a new locale?

Exchanging is a great way to make the most of your second home or fractional property — plus, you’ll have the added convenience of working with an exchange family that knows just as much about their location (favorite restaurants, beaches, activities) that you’ve grown to know about your location.

Exchanging typically results in a much nicer vacation than arriving at a relatively unknown and impersonal rental home.

Our tagline says it all:  Exchange Keys. Trade Dreams.

Over time, the concept evolved to resorts conceived and developed entirely around the concept of fractional ownership. A developer would typically build a resort property that included fractional homes/condos, either solely fractional or mixed with whole-ownership homes. Examples of these resorts would be Villa La Estancia (Cabo San Lucas, Mexico) and Old Greenwood (Truckee/Lake Tahoe, California).  Our resort directory has a somewhat-complete listing of typical fractional resorts (http://www.fractionalexchange.com/resort_directory).

The primary growth of the fractional industry has been due to fractional resorts. However, we’re seeing more and more interest in “standalone” vacation homes being converted to fractional ownership.

Converting an existing vacation home to (or developing a new home for) fractional ownership involves mainly legal documentation to establish co-ownership and to specify the rules and regulations specific to co-ownership. For the physical home, very few, if any, changes need to be incorporated — typical would be the addition of “lockers” in the basement or garage for each co-owner’s storage of personal items, for example.

An informative discussion of the legal considerations for fractional ownership is available at the website of Andy Sirkin, a California attorney specializing in fractional ownership:  http://www.andysirkin.com/Index.cfm Mr. Sirkin is known in the fractional industry as an expert on fractional ownership and his website is an absolute wealth of information for anyone interested in fractional ownership.

There are many things to consider with fractional ownership and one of the most important is the rotation schedule — specifically, when will each owner be allowed to use the property and when will maintenance be performed? Other specific rules need to be considered as well:

• What is the smoking policy?
• Pets?
• May an owner allow unaccompanied guests to use the property?
• What is the minimum age allowed to use the property?  For example, there may be a requirement that at least one person in the party be older than 25 years of age (so that an owner doesn’t allow his teenagers unaccompanied access to the property).
• Breakage/damage policy?
• What types of personal effects are allowed?  When may an owner “add” to the decoration of the home?
• What is the replacement policy for furnishings, fixtures and equipment?
• What is the policy when an owner desires to sell their ownership? Do the other owners have the right-of-first-refusal?
• Who will manage the property?

These are just recommendations. Beyond the specifics, for all intents and purposes a fractional property is administered similar to a homeowners association, with collection of dues and maintenance performed collectively.

For anyone interested in fractional co-ownership, we highly recommend a consultation with Andy Sirkin (http://www.andysirkin.com/Index.cfm) to examine the various methods of establishing fractional ownership.

The Registry Collection®

The Registry Collection® (TRC)  is probably the best-known exchange company in the fractional ownership industry.  Membership is $250 per year and a charge of $250 per exchange is assessed.

Members are limited to exchanging between approved resorts; while quality of their resort selection is high, members are limited to the locations and resorts that choose to affiliate with TRC.

Some of their available resorts are timeshare properties.

The method of exchanging is that you contact them and they check their availability for an exchange. Members “deposit” time with TRC and that constitutes the inventory they draw on to arrange exchanges. For their “deposits,” members earn points and those points are redeemed for exchanges. Membership requires that you be an owner at a participating resort. TRC is owned by RCI, a huge player in the timeshare industry.  http://www.theregistrycollection.com/

• Pros: Excellent resort quality; decent resort selection.
• Cons: Limited to their member resorts; high membership and per-exchange fee; exchange dependent upon their inventory. Deposited inventory from members can sometimes consist of off-season weeks, limiting availability of exchanges. Inclusion of timeshare properties within the collection.

Preferred Residences®

Pretty much the same business model as The Registry Collection® (see above) and cost, Preferred Residences® (PR) is a relatively new entry into the exchange business and as such, does not yet have many participating resorts. PR is owned by Interval International®, another huge player in the timeshare exchange business. http://www.preferredresidences.com/index.html

• Pros: Excellent resort quality; good benefits for members.
• Cons: Limited to their member resorts (very limited selection); high membership and per-exchange fee.

Resort-to-Resort®

Owned by Intrawest®, Resort-to-Resort® (R2R) seems to have been established mainly to offer exchanging between resorts developed by Intrawest® (a huge player in ski industry real estate and resorts).  Their offerings have been expanded to include partner resorts as well.  Membership requires that you be an owner at a participating resort.   http://www.resort2resort.com/

Elite Alliance®

A collection of resorts (14) sharing an exchange program.  $250 per exchange, with members depositing weeks for exchange.

http://theelitealliance.com/

FractionalExchange.com®

Okay, a plug for our concept. FractionalExchange.com® serves as an owner-to-owner “umbrella” network, where members may own anywhere and exchange anywhere.

Many of the resorts listed with the previously mentioned exchange companies are represented on FractionalExchange.com®. We’re the ONLY exchange service where owners at fractional resorts can trade for standalone vacation homes, and owners of vacation homes can trade into fractional resorts. We also keep things simple: we connect owners directly with other owners with the following benefits:

• No points
• No exchange fees
• No limits on location or resorts.
• Low membership cost.
  

FractionalExchange.com is designed around a simple observation: with the popularity of the internet, people want to “go direct” as much as possible.

More to come.  We’ll work on expanding this article as research time allows.

http://video.foxbusiness.com/8751288/rent-out-your-home?category_id=1292d14d0e3afdcf0b31500afefb92724c08f046

Vacation Home Ownership

Fee simple ownership of a second residence, typically located in a resort destination.    Owners are free to use, rent, gift or otherwise allow usage of their residence at any time and are responsible for all costs associated with ownership.

Fractional Ownership

Shared deeded ownership of a home, condo or other asset (yacht, aircraft, etc.), evidenced by a deed, TIC or legal entity.  Shared ownership typically allows usage of the asset according to a pre-arranged schedule (either fixed weeks or months, or rotating weeks/months or a combination of both fixed and rotating periods of time).  Fractional properties typically consist of a home or condo contained within a fractional resort, with all maintenance, scheduling and guest services offered by resort management.  However, standalone fractional residences do exist, consisting of shared ownership of a vacation property by several different parties.

Fractional Resort

A real estate development consisting of homes and condominiums built and sold specifically for shared ownership.  Fractional owners own a deeded share in a specific residence and are allotted usage pursuant to a rotating or fixed schedule.  All maintenance, scheduling and guest services are handled by resort management.

Residence Club

Similar to a Fractional Resort.  However, owners may not necessarily occupy their owned residence during each stay.  Owners may be housed in a similar home, cabin or condo upon arrival, rather than the residence they own.  Scheduling is greatly simplified with this approach, but owners have no guarantee of using their residence.

Destination Club

A for-profit entity that owns and leases prime vacation properties for use by its membership.  Typically, a destination club is organized similar to a golf country club, with members allowed to use club assets, but having no ownership of the assets.  Members typically pay a fully (or partially) refundable initiation fee and monthly dues.  Except in limited circumstances, members do not own any portion of the destination club.  Destination Clubs offer a wide variety of destinations to their members and a hassle-free vacation experience, but unlike ownership, members may not rent their usage, but may be able to gift their usage to others.

TIC (Tenants-in-Common) Ownership

Tenants in Common (TIC) ownership is often paired with a TIC Agreement giving each owner an exclusive right to occupy a particular space (such as an apartment, house or office) within a residential or commercial property. Assigning occupancy rights in a TIC agreement creates an arrangement that feels and acts like a subdivision when legal subdivision is impossible, unaffordable, or too time-consuming.

Condo Hotel

Full- or fractional-ownership of a residence contained within an operating hotel.  Hotel management provides all services to the residence.

Fractional Rotation

A pre-determined fixed or rotating schedule defining usage by multiple owners of a fractional property.

Standalone Fractional

Shared ownership of a fractional property not part of a fractional resort.  A standalone fractional property may be within a vacation resort, but consists primarily of a property originally developed for sole ownership, rather than fractional ownership.  Standalone fractional properties may be self-managed or professionally-managed.

Timeshare

A right-to-use concept consisting of an agreement allowing a non-deeded “owner” the right to use a property for either a rotating or fixed time period each (or every other) year.  The right-to-use typically expires after a specific period, with usage of the property reverting to the property owner (typically the original developer).

Home Exchange

An owner-to-owner arrangement to exchange usage of residential properties, primarily consisting of primary homes.  In the event primary homes are exchanged, owners typically arrange a simultaneous exchange consisting of the home and optionally, vehicles and sometimes pets.  Second-home exchanges are easier to arrange, as the exchange need not be simultaneous and property of a personal nature (photos, valuable items, business records, etc.) is typically not maintained at a second-home.

Fractional Home Exchange

An exchange of a fractional property with another vacation homeowner.

FractionalExchange.com^®

An owner-to-owner exchange website consisting solely of vacation homes, condos, fractional homes, condos and second-homes.  Members arrange simultaneous and/or  non-simultaneous exchanges with other members, thereby greatly enhancing the utility of their ownership.

Exchange Facilitator

A company specializing in the exchange of vacation properties.  Vacation property owners typically pay an annual membership fee and a per-exchange fee when utilizing an exchange facilitator.  Note:  Fractional Exchange is not an exchange facilitator; it is a website that offers users the ability to message other users to arrange for the exchange of luxury leisure assets (homes, condos, fractional units and residence club shares).  Examples of Exchange Facilitators:  The Registry Collection^® (www.theregistrycollection.com) and Preferred Residences^® (www.preferredresidences.com).

Luxury Leisure Asset

A vacation home, fractional home, condo, yacht or other property.

The Registry Collection^®

A popular exchange facilitator, with approximately fifty resort affiliations in the United States.  The Registry Collection^® typically markets its services to a fractional resort developer, charging the resort an initial affiliation consulting fee and a yearly affiliation fee thereafter.  A fractional resort developer typically gains value from the consulting services of The Registry Collection^® and ultimately, the ability for owners to exchange use of their property for use of other resort properties adds value to the fractional resort development.  The Registry Collection^® charges an annual membership fee (to owners) of $250 and a per-exchange fee of $250 for exchanges that are successfully arranged.  The Registry Collection^® is affiliated with and owned by RCI^®, a large company involved in timeshare exchanging and timeshare resort management.  www.theregistrycollection.com

Preferred Residences^®

Another exchange facilitator.  Preferred Residences^® typically markets its services to a fractional resort developer, charging the resort an initial affiliation consulting fee and a yearly affiliation fee thereafter.  A fractional resort developer typically gains value from the consulting services of Preferred Residences^® and ultimately, the ability for owners to exchange use of their property for use of other resort properties adds value to the fractional resort development.  Preferred Residences^® charges an annual membership fee (to owners) and a per-exchange fee for exchanges that are successfully arranged.  Preferred Residences^® is affiliated with and owned by Interval International^®, a major company involved in timeshare exchanging and timeshare resort management.  www.preferredresidences.com

HomeExchange.com™

An owner-to-owner exchange website consisting mostly of primary residences throughout the world.  Owners typically arrange for simultaneous exchanges of their primary residences.  www.homeexchange.com

Lockoff

Typically a closet, cabinet or room where access is restricted by use of a locking mechanism, typically consisting of a keyed door lock.  Owners typically utilize a lockoff for storage of personal property at their second- or fractional-property while they are not in residence.