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So my most recent listing is what is called a shared interest ownership. And since I recently put one on the market, I thought now is a pretty good time for me to explain to you guys what that means.

Here’s why you might be interested in Shared Interest or it’s also called Fractional Ownership. This means that you own only a portion of the real estate. This is different from a timeshare where all you’re buying is the right to use it. In shared interest or fractional ownership you own part of the real estate.

Which means that that real estate can appreciate the same way if you owned the entirety of the building. The reason that this can be beneficial is because you can buy properties or buy into properties that you wouldn’t be able to afford otherwise. On vacation rentals you would only be up here once a month. On a quarter share ownership, you get to use it for one week a month and you get a quarter of that real estate.

They don’t necessarily appreciate the same rate as full ownership in the last year. We’ve seen the Midrange fractional ownership in Summit County appreciate as much as 75% in a year. Compared to the 22% of the full. Now, the smaller the fractional ownership the slower it appreciates. So you can buy as little as a 12th or a 24th of ownership.

The most common we see and the ones that we see at the best appreciate our quarter and eighth chairs and that’s what I just put on the market. It’s a quarter share of a one bedroom in Keystone for example. We listed it for, You’re going to think this price is crazy for $150,000 which is like an incredibly low price for anything up here in the mountains. But if you were to buy that whole unit or one of the other one bedrooms in the building, for example, you would pay over a half million dollars.

Now this gives you a way to buy into that building when you might not be able to afford to or just want to. Otherwise, if you have any questions on shared ownership or fractional ownership, please hit me up.

I will tell you that lending is a little bit more complicated because you do have to use specific lenders because National Banks won’t lend to them. Since about ‘08, ‘09 when the last shakedown of mortgages happened and you do need to put more money down.

If you’re able to buy in cash or you’re able to put that money down and you’re just more comfortable making a smaller purchase, they can be a great option.