From: The Boston Globe
Ever since they first visited Bermuda on their honeymoon in 1996, Kevin and Peggy Farren of Quincy had dreamed of purchasing a second home there. “We’d go to other places and say, ‘Oh, it’s not like Bermuda,’ ” Peggy says while lounging in shorts and a sleeveless top in the tres chic living room of her new condo just across Hamilton Harbour from the nation’s bustling capital. “We came down here time and again and really wanted to buy, but had ruled it out because the laws are so strict keeping foreigners from owning property.”
Then, in April of last year, they heard about the little country’s latest trend: fractional ownership. Think time share but with more time, more amenities, and more flexibility. A scaled-back second home for those who still have some savings left. “Fractionals provide a deeded interest in the suite of your choice at a higher-end resort,” says Tim Petty, sales director of Newstead Belmont Hills Resort and Spa, where in February the Farrens closed on a one-sixth share in a 1,200-square-foot one-bedroom (and the strict laws against foreigners that they had feared didn’t apply to them). “You can own a vacation home for much less than it would normally cost, but have none of the headaches associated with it.”
Peggy, a school psychologist, and Kevin, a registered nurse, bought at a preconstruction price of $209,000, plus a monthly fee of $600 that covers amenities, maintenance, insurance, and taxes — affordable because of the low mortgage on their primary home. For that they can spend eight weeks a year luxuriating in their water-view Jacuzzi, king-size bed, granite-and-stainless kitchen, and large, partially covered patio with gorgeous sunset views. They have daily housekeeping service, a concierge, access to a semi-private 18-hole golf course, spa, fitness center, tennis courts, and pool, and a free water shuttle to town — amenities typical of fractional ownership. They’re also steps from Beau Rivage, one of the best restaurants on the island. “We didn’t come down that trip planning to buy,” Peggy says. “It was impulsive, but impossible not to.”
Fractional ownership is believed to have gotten its start in the early 1990s at the Deer Valley Resort in Park City, Utah. “I noticed that the majority of homeowners in Park City were only using their places four to six weeks a year,” recalls Steve Dering, a founding partner at Deer Valley. “It dawned on me that there could be an opportunity for a new real estate product.” Dering based his business model on the more restricted quarter-shares started in the early 1990s at a few ski resorts in the American West and on equity golf country clubs, in which a few hundred members own the course and clubhouse and are allowed unlimited use and unassigned tee times. “We thought we were creating Deer Valley for the average skiing household that could not afford whole ownership but wanted a vacation home,” he says. “The big surprise was that almost every one of the 195 people who originally bought could have afforded whole ownership in the expensive condo across the street.
Vacation Finance offers fractional and timeshare financing solutions.
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