Fractional Ownership Model for Vacation Rentals
Of all the people here on BiggerPockets, do any of you follow a fractional ownership model when it comes to vacation rentals where your primary goal is use rather than profits? In other words, have any of you ever gotten together with friends or family to buy a really cool property that you want to own so they you can use it for vacations, etc. and then you rent it out as a vacation rental in order to cover the costs of the property?
Most investors that I know would rather put their money in a property that will give them the highest profit and then just spend money when they go on vacation rather than buy a property that doesn't produce a very high return just so that they can have the property for when they want it.
Personally, all my vacation rentals have the primary goal of use and the secondary goal of making sure the property covers its own costs and then third goal is profits. I just wanted to know if there's anybody else out there like me or if I'm a rarity on this platform.
Most Popular Reply
Personal use first is a completely valid goal as long as everyone agrees that it is not a pure investment. The hard part is not the vacation calendar. It is repairs, upgrades, cash calls, exit rights and what happens when one owner wants out. I would put those rules in writing before the property is chosen. A great house can become a terrible partnership fast when expectations are different.