Ten + Points for Successful Vertical Fractional Real Estate Development
Everyone seems to have to have a top ten list for this and a top five list for that. And so do I. In fact I have penned numerous articles on fractional real estate ownership, trying to zero in on the very most important components for success in the growing niche of vacation home ownership. As with any recipe, the ingredients vary with the chef. Perhaps one chocolate cake has more sugar, another more layers and some come straight out of a box.
Whatever the mixture, opinions differ on just the right measurements. The latest identifiers for success come from Dave and Emille Ellingson owners of the Meriwether Ranch, a working Cattle Ranch in Southwest Montana which offers rolling lots for single family vacation ranches. The offering will soon include vertical fractionals: vertical? meaning that it fits specific parameters.
Just what are these ?rules? for success in a vertical fractional market?
1.It is located in a superb area for the primary activity. Ski resorts should have the finest slopes; diving resorts, the finest seas; golf properties, the ultimate in links; fly-fishing resorts the ultimate in clear streams.
2.The vertical fractional should then be in the primo location within that general area. If you want to experience the finest wines, a fractional property in the Napa Valley makes sense. If you are an art lover, perhaps an urban property is the way to go. If diving is your passion, Nevis is a pristine environment.
3.Go with a credible developer. You want to make sure they are in it for the long haul, have had previous success and are sensitive to the environment around them.
4.Goods and services should be reasonably available. Of course it is quite fine to be in a remote locale, but you shouldn?t have to drive forever and a day to get supplies in and/or out.
5.Fractionals are primarily purchased are convenience and value. The area should literally teem with expensive luxurious properties and the quality of the fractional property should match or exceed those around it.
6.The season for the primary activity should not be brief. A window of excellent weather on a north country lake or two weeks of cool ocean breezes in a jungle do not lend themselves to a successful venture or investment in this particular market.
7.Don?t get in on the tail end of the market. To win in the fractional world be the first ?on your block? or close to it.
8.Marketing is of prime importance so have access to past and repeat customers. Those who already have an affinity with the area are your best bet to talk with.
9.If you do not have proximity to a commercial airport, make sure you have a decent jet approve private strip available. Your owners will undoubtedly be busy people who will not want to waste their precious relaxation time coming and going to their property.
10.Another terrific attribute is to have a wonderful, rich history to tell or a story to relate. Did Hollywood movie stars come to escape the pace of stardom? Do football heroes return for their golf vacations year after year? Did pirates lose pieces of eight among the reefs?
11.Finally?because this list needed more than ten items to clearly make its statement, make sure you create a plausible use plan that matches the owners? utilization of the Club component of the property. If they cannot use their purchase they will never be happy. And they will let others know of their disappointment. This 11th guideline is perhaps the most important for a vertical niche fractional property.
If you are thinking of getting involved in this exciting segment of real estate, do your research and ask yourself if your property will pass the 11 point test!
Carl G. Berry RRP is co-Chairman of Star Resort Group. He has more than 30 years of resort and urban development experience. Founded in 1978 Carl's company, California Resorts, Inc. (dba Resort Development & Advisors), is the market leader in urban share projects such as The Manhattan Club in NYC, San Francisco Suites and Powell Place City Shares in San Francisco. Mr. Berry is a co-founder of The World?s Finest Resorts (now part of RCI?s Registry Collection). He has served as Chairman of the American Resort Development Association (ARDA) and and is a member of the Red Flight, Recreational Development Council of ULI. http://www.carlgberry.com
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