Purchasing a stunning, single family home in a choice destination doesn't have to be a dream. Shared ownership makes owning a second home much more realistic. Fractional Villas offers luxury villas in prestigious resort locations worldwide. Just pick your fancy: mountain, metro, beach, or lifestyle getaways like ranches, country villas, vineyards, islands and golf resorts.

Fractional Villas first appeared in the marketplace in 2003 when they purchased a home in Mammoth, California. They made sure the home was in top form and up to their 5-star standards before fractionalizing it. By 2006 the company saw a turn in the market and "we determined that our expertise could be better capitalized on by providing turnkey fractional services to owners of luxury resort area homes already on the market," states Robert Vicino, founder and president.

Since then, the company has grown to just under 200 owners with about three dozen properties from California to New York, throughout Latin America, the Mediterranean and other highly coveted, global resort destinations.

How It Works

Fractional Villas helps current second home owners in luxury resort areas catch a break. Owners turn to Fractional Villas when they realize that their expenses far outweigh their enjoyment of the property. So they either want to sell or hang on to a portion of the property and fraction off their unused time.

Through a patent pending sales system created by Fractional Villas, sellers can fractionalize their property to up to 12 individual owners, while also still promoting it for whole ownership to just one owner. "By doing so, sellers are not locked into just one marketing approach and can broaden their opportunities. Without Fractional Villas' expertise sellers would be unlikely to succeed in their attempt to sell fractionally," says Mr. Vicino.

Mr. Vicino continues "Most sellers and their brokers think they can just offer a property fractionally, put it on the MLS or the internet, and it will sell. It won't! You might get a few buyers into escrow, but you will be unlikely to close once they realize there are many missing parts to the puzzle, including financing, insurance, properly vetted legal documents, compliance with state and local laws, branded property management, reservations, and concierge services. Fractional Villas® provides all of the expertise and services on either a complete contingency or an a la carte basis to properties that meet our strict quality standards."

Destinations and Exchanges

Fractional Villas choose resort destinations from the Mediterranean coast, to the exotic islands of Africa, Latin America, Hawaii and across the United States. They currently have about three dozen homes and continue to purchase new properties.

All owners are provided the opportunity to exchange with each other under the Fractional Villa network, subject to the rules and regulations for their property. "We are developing a revolutionary new exchange network called, Villa Tree," exclaims Mr. Vicino. "Villa Tree will allow members to exchange their priority time with other high valued assets within the worldwide network, including: villas, hotels, resorts, jets, yachts and exotic cars, while monetizing their asset with a straightforward and simple system. Villa Tree will be unveiled in a few months."

Fractional Villas Cabo San Lucas

The Villas

These "strict quality standards" Mr. Vicino speaks of start with finding exquisite properties in highly desired locations. The homes must be of sound construction, have flawless architecture, exceptional furnishings, 5-star amenities and no deferred maintenance. Their website states that 90% of the homes presented for offering are turned down because they fail to meet Fractional Villas®' quality control standards and "Wow!" factor.

Each home in its repertoire is decorated with natural textures and materials, warm and beautiful furnishings, state-of-the-art electronics and theater systems, gallery quality artwork and collectors' photography.

Owners can purchase a 1/4 to 1/12th interest which allows for 4 to 13 weeks per year. Shares are sold for as low as $99,000 and upwards to the $3.5 to $4 million range. Annual dues are split among co-owners to cover direct expenses with no markup by Fractional Villas®. These dues range from $4,200 to $6,000 per year and include utilities, taxes, insurance, maintenance, property management, and reservation and concierge services.

Property value for a Fractional Villa home is anywhere between $1 m and $12 m with a $2.5 m average. Each villa has 3 to 5 bedrooms, and can accommodate 6 to 10 guests each. Living spaces range from 1,200 to 8,000 square feet.

This is a fee simple deeded fractional interest ownership. Each owner receives an undivided, fractional interest as a tenant-in-common.

Reservations

Fractional Villas uses a priority reservation system, rather than a fixed yearly schedule. A tiebreaker system is in place if necessary. Owners can swap or combine weeks and stay as long as they wish until an owner with a higher priority wishes to use the property. The Reservation Concierge manages all villa reservations.

There is also an Exclusive Monthly Use System at certain villas which allows owners to purchase the exclusive right to use the villa, year after year, for a full month.

Rent or Sell

Basically, some villas allow for rentals and some do not. With rental potential, some villas may qualify for 1031 exchanges and additional tax benefits. Owners may sell their share to another owner of the property, or to any third party. Owners can sell the property through whichever medium they want; however, Fractional Villas® does help owners list and sell shares.

Services

Since there are so many details that go into second home usage, Fractional Villas wants its owners to know that everything will be taken care of. Some of the special services villa owners receive are:

• Pre-arrival arranging of personal items throughout the home
• Pre-stocked fridge
• Housecleaning
• Wine storage
• Owners' storage facilities for personal items
• Fully stocked game rooms
• Computer equipment
• Mountain bikes, sleds, etc. depending on the location
• Hot tubs
• Fully accessorized gourmet kitchen, dishware and appliances
• The property manager looks after security, bookkeeping, bill processing, repairs, landscaping, snow removal, pool service and coordinating owner usage.
• On-site concierge for personal whims: from hiring a private chef, nanny, chauffeur, bodyguard or special security, to setting up tee times and arranging outings, getting tickets and reservations and much more.

Future Ventures: Yachts

Fractional Villas has formed a sister company called Yacht Club of the World (YCOTW). "YCOTW will take fractional yacht ownership to a whole new level under a patent pending system," states Mr. Vicino. "We are designing a custom line of luxury 88' LOA, 21' beam motor yachts." Each $6 million yacht will be sold to 12 like-minded owners for about $299,000 each. Each owner also pays their proportional share of the operating expenses, estimated at about $2,500 per month.

Each yacht will include:

• 3 decks
• 4 ensuite staterooms for 8 guests
• Fulltime crew of three with their own private crew quarters
• Spa
• Theater
• Several bars
• Dining areas
• Boating and water toys
• Everything is included except the food, fuel and liquor

Excited about the prospects of this venture, Mr. Vicino adds: "Here's the revolutionary part: A total of 12 identical yachts will be sold and positioned around the planet in a 'Ring of Power', following the sun to all of the world's most exotic ports including the West and East coast of America, the Caribbean, the Mediterranean, the South Pacific, Australia, New Zealand, Thailand and Central America," says Mr. Vicino. "Each owner will be a member of the Club and be entitled to use all of the yachts in their Ring of Power, without using the same vessel a second time until they've cruised on all of the others. Over a period of three years, each owner will have circumnavigated the globe, using all 12 yachts for 1 week at a time, once per quarter." Subject to a correction in the current economic environment, the program is expected to be offered in early 2010.

Green Ownership

Fractional Villas proudly provides Green Ownership homes. Shared usage of homes better utilizes existing resources, reduces the need for new construction and helps to eliminate the need for further deforestation. Green Ownership homes use only organic and ecologically friendly cleaning products and recyclable consumables. When a home in a resort area gets more use, it helps to stabilize local employment and in turn enhances the local economy. The market for home sales is also expanded with Green Ownership. It creates a more liquid market for area home sales, thereby helping to support the underlying real estate market values.

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We've recently covered several companies that specialize in offering fractional single family vacation homes. Each of the companies has several fractional homes and many of them are located in various countries around the world. The articles include:

  Alpine Quarters
  Resort Equities
  Elite Destination Homes