Checklist for Fractional Resort Real Estate Success

When resort real estate experts congregate in throngs to learn and share information about an exciting product, they are bound to come up with some guidelines. A May 2006 gathering of nearly 400 resort and real estate experts at the Ragatz Symposium in Coronado, California was held in wrapped attention as their colleagues shared “dos and don’ts” about Fractional Real Estate for developers.

Fractional Real Estate projects (including Private Residence Clubs) increased by 218% say Ragatz Associates, internationally recognized as a leading market research organization in the resort industry. Primarily, the rapid growth in this intriguing product results from the void it fills for both consumers and developers: it has a good image; it offers variety of types of products and locations; many major hospitality brands have jumped aboard; and it is increasing in market acceptance.

So, if you are a developer considering fractional real estate, what seems to be working best, you ask? Well, it is real estate after all. Logically, the first component is always location in a popular vacation resort area. Secondly, a great location within the resort is always optimal. If families can ski-in/ski-out, golf-in/golf-out, it is a bonus for all involved.

After location, buyers look for credibility in a developer. What have they done before? With whom are they associated? Do they know the area? All these elements are key to building a strong foundation with potential buyers.

Fractional Resort Real Estate is primarily residential in nature, so adjacency or association with a fine hotel and being able to draw on its services, amenities and dining opportunities boosts the value of a Fractional purchase. It also makes it easier to draw potential clients who are already favorably predisposed to the on-site offerings.

Developers are urged to look at the traditional real estate offerings in the area. Are there limited and/or expensive second homes in the vicinity that makes a fractional purchase an enticing venture for a family who would prefer to have the advantages of home ownership but not the hassle of keeping up a second vacation home? Are homes in the location priced out of reach for even comfortably positioned second home buyers?

Your location must have year-round appeal or at the very least two strong visitation seasons. A ski resort that offers no summertime activities or a lake that is inaccessible nine months of the year do not lend themselves to luxury fractional ownership.

If your fractional resort is the first one to hit the market, or has limited local competition, your chances for success are better, says research presented at the Ragatz Symposium. Experts also say that proximity to a large affluent visitor base, along with urban centers helps put the stamp of pre-disposed success on a fractional product.

Another marketing assurance for a developer to consider is access to a data base which includes resort visitors and real estate prospects. This kind of data base takes building a relationship with local brokers and tourism centers such as chambers of commerce, local attractions (e.g., lift tickets/greens fees), as well as the utilization of various internet sources.

Add a great history of the area (legends, tales of healing waters, golf greats who frequent the course) or story telling opportunities for the future (improvements, plans for the future, activities) to the mix and you have a recipe for success.

This check list for success is not only enhanced but solidified with a use plan which is designed around the buyer. Without that important look at your owner, all your hopes and plans and dreams can come to naught.