Fractional ownership, also known as tenant in common (TIC), is a form of possession of real property title. Under this co-ownership structure, individuals will own an undivided fractional interest in an entire property and will share their share of the net income, tax benefits, and appreciation. Additionally, they will receive a separate deed and title insurance for their percentage of ownership in the property and will have the same rights as a single owner.
Fractional ownership is not a new concept. In fact, it has been successfully applied to a number of industries, including yachts, airplanes, tourist condos, and luxurious second real estate residences. The resort industry is entering a period of explosive growth, and luxury fractional resort products are becoming a more important and recognized component of this industry. According to Omni Brokerage, Inc, TIC’s real estate investments topped $ 4 billion in 2005. Additionally, it has become the preferred investment vehicle for real estate investors who want to defer capital gains through a 1031 exchange and own property. real estate without the headaches of management. .
Fractional ownership typically ranges from 1/4 to 1/13 of shares. The abundance of the location and the length of the season determine the size of the action. Most of the recently completed developments are located in the Rocky Mountain ski areas, but the concept is spreading rapidly to other popular domestic tourist destinations in the United States, the Caribbean and Mexico and other international vacation spots. The price of fractional ownership shares varies widely and can be influenced by various market factors, including unit size, number of owners, location, amenities, and available supply. Typical share prices range from $ 100,000 to $ 500,000, but can easily exceed $ 1.0M for high-end Private Residence Clubs (PRC).
Fractional ownership of the ranch
Ranch Partners, LLC is bringing the concept of fractional ownership to the ranch real estate industry. We have found that the price and liability for total ranch ownership are beyond most of our clients’ wishes and expectations. By packaging the ranches into fractional ownership, we are able to serve a significantly larger pool of investors and provide a luxury resort experience, while continuing to preserve the western cattle heritage. All owners will have access to the ranch for 4 seasons, 8 to 12 weeks of luxury accommodations and unlimited use of the ranch facilities and recreational amenities.
While all fractional ranches have access to exceptional recreational activities such as hunting, fishing, hiking, and horseback riding, individual ranch properties can be developed to suit a variety of homeowner lifestyles. Some ranch properties can suit the luxury resort owner, with high-end accommodations, full-service management, and a variety of amenities similar to private residence clubs. Other fractional programs can be designed around ranch operations. These programs give the owner the opportunity to live and play on a working ranch. Accommodations are much more conservative, the lifestyle is more rural, and activities are related to ranch operations, including horses, cattle, agriculture, and ranching.