PROView - January 2008 - (Page 13) and can be combined for efficiency and convenience. Q - What about co-ownership decision making? A - Check the documents to see if there are certain mandatory duties – these should include allocating usage, paying the recurring operating expenses, and maintaining the property in good condition. Does the homeowner association hire a management company to take care of everything, or most things? If decisions are made by a majority, it permits a majority to take usage rights away from or add cost burdens to the minority. However, requiring a consensus decision can paralyze the group if a co-owner is uninterested, unreasonable, or angry. Q - What issues should I review for my buyer client in evaluating a fractional? A - What is per-night cost (annual cost w. management fees & dues divided by # of days of use/year? Will I be able to control how costs, especially management fees and dues increase over time, and how property is managed? Can the property be rented out? Is the rental amount charged controlled? Is this potential tax benefit or burden the primary goal of your client? What restrictions apply to resale? What competition will I face within the property and in the immediate area? Q - How do fractional co-owners share expenses? A - Operating expenses such as insurance, taxes, maintenance, repairs, improvements, utilities and management are usually divided in proportion to ownership, so that a 1/4th fractional owner will pay 25% of each of these expenses. Q - What about Financing? A - While group mortgages for buyers of vacation fractionals used to be prevalent, today individual fractional financing is available even for small co-owner groups purchasing a single house or condominium that is not within a fractional development. Q - Are payments on a fractional ownership home tax deductible? A - For deeded property, tax treatment of a vacation home depends on how often it is used for “personal use” and whether it is ever used for a rental. There are three possible tax treatments, each with their own rules on tax deductions: “Pure Second Home”, “Pure Rental Property”, and “Second Home/Hobby Rental”. Advise your clients to check with their tax advisor, since appropriate advice varies by individual situation. For further information on fractional ownership, visit: 1. “Fractionals are NOT NOT NOT Timeshares – You can bet your Bippy on it!”, by M. Coffing, Blog posted 10/3/07 on Active Rain, an online community for R. E. Professionals 2. “Vacation Home Fractional Ownership” 7/24/07 by Attorney Andrew Sirkin @ www. andysirkin.com 3. “Second Property Types Compared”, Newconsearch.com May 21, 2007 4. “Fractionals: A Warm Spot in a Cooling Market”, The New York Times April 13, 2007 6. “Home Away From Home” March 2007, by Karyn Strauss, http://www.hotelsmag.com/ archives/2007/03/sr/ 7. “Vacation Homes Concepts Clarifier 2007-2008”, Real Estate Equities Vacation Investments, LLC. 8. www.Fractionallife.com/articles 9. www.LuxuryFractionalGuide.com 10. “Fractional Ownership: Getting a Piece of the Pie” www.gosselinlaw.com 11. “Selling a Slice of Luxury”, The New York Times: Great Homes, 10/25/06 12. “For Many, Vacation Fractionals Makes Sense“, Realtor Magazine Daily News August.10, 2006 13. “Joint Ownership Market Takes Off”, Realtor Magazine Online Daily Real Estate News Sept 6 05 14. “Counting in Fractions”, Robb Report Vacation Homes Spring 2005, www. vacationhomesmag.com PINELLAS REALTOR® ORGANIZATION January 2008 13 http://www.andysirkin.com http://www.andysirkin.com http://Newconsearch.com http://www.hotelsmag.com/archives/2007/03/sr/ http://www.hotelsmag.com/archives/2007/03/sr/ http://www.Fractionallife.com http://www.LuxuryFractionalGuide.com http://www.gosselinlaw.com http://www.vacationhomesmag.com http://www.vacationhomesmag.com
Table of Contents Feed for the Digital Edition of PROView - January 2008 PROView - January 2008 Contents Chairman's Notes Feature ProActive Marketing Finance Marketplace Analysis Home Sales Report MLS Update MLS Mind Your Manners Education Calendar of Events & Programs PROBiz Special Feature Brokerage Design New Affiliates and Members for 2008 PROView - January 2008 PROView - January 2008 - PROView - January 2008 (Page Cover1) PROView - January 2008 - PROView - January 2008 (Page Cover2) PROView - January 2008 - Contents (Page 1) PROView - January 2008 - Chairman's Notes (Page 2) PROView - January 2008 - Chairman's Notes (Page 3) PROView - January 2008 - Feature (Page 4) PROView - January 2008 - Feature (Page 5) PROView - January 2008 - Feature (Page 6) PROView - January 2008 - ProActive (Page 7) PROView - January 2008 - Marketing (Page 8) PROView - January 2008 - Marketing (Page 9) PROView - January 2008 - Finance (Page 10) PROView - January 2008 - Finance (Page 11) PROView - January 2008 - Finance (Page 12) PROView - January 2008 - Finance (Page 13) PROView - January 2008 - Marketplace Analysis (Page 14) PROView - January 2008 - Home Sales Report (Page 15) PROView - January 2008 - MLS Update (Page 16) PROView - January 2008 - MLS Mind Your Manners (Page 17) PROView - January 2008 - Education (Page 18) PROView - January 2008 - Calendar of Events & Programs (Page 19) PROView - January 2008 - PROBiz (Page 20) PROView - January 2008 - Special Feature (Page 21) PROView - January 2008 - Brokerage Design (Page 22) PROView - January 2008 - Brokerage Design (Page 23) PROView - January 2008 - Brokerage Design (Page 24) PROView - January 2008 - Brokerage Design (Page 25) PROView - January 2008 - New Affiliates and Members for 2008 (Page 26) PROView - January 2008 - New Affiliates and Members for 2008 (Page Cover4)
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