Seller's Guide

Why sell fractionally?

Do you own a vacation property you've been trying to sell unsuccessfully, perhaps because it is worth so much? Or have you owned a vacation home for quite some time and wonder how much it has appreciated? Would you like to get cash out, but really hate to part with it? Consider fractionalizing the property. There are numerous benefits to selling slices:

Have your cake and eat it too:

By selling fractionally, you can actually retain partial ownership while selling off fractions to realize the appreciation gain. You can spend that cash to pay off debt, improve your home or purchase slices of other dream homes elsewhere to diversify your investment and vacation experience. For example, you might split your home into quarters. You could sell 3/4 and keep 1/4 for your use. Additionally, by keeping a slice, you can continue to benefit from its appreciation.

Fetch a higher price for your property:

Fractionalization lowers the entry price point, thus expanding the potential buyer pool. Experience has shown that sellers incrementally increase their gain with each fraction. In other words, a property sold in halves may command a slightly higher price than a property sold whole, whereas a property sold in eighths might fetch a significantly higher price. Some developers have succeeded in selling fractional properties at more than double assessed value for a single property. Recently, this strategy has worked particularly well for properties that are luxuriously furnished and include access to clubhouses, swimming pools, beaches, golf, skiing, or other desirable amenities.

Take advantage of the 1031 tax exchange program:

The IRS recently permitted the use of 1031 exchanges to purchase fractional TIC property, thus further expanding the available pool of buyers looking to invest. The 1031 exchange is a rapidly growing trend as more baby boomers retire and exchange into retirement and second homes.

Share the cost burden:

Studies show that vacation homes are under-utilized by their owners and sit empty a vast majority of the time. On average, owners spend only 17-20 days a year in their vacation home. And yet they continue to pay for all carrying costs annually, including mortgage, property taxes, utilities, insurance, cleaning and maintenance. Imagine being able to share that cost with co-owners.

Help the local economy:

Shared homes are used more often. They increase the number of visitors to the area during shoulder seasons without increasing peak season crowds. Shared homes are more often professionally cleaned and regularly maintained. The result is an economy that offers more steady employment opportunities for locals, and a more valuable housing stock.

If you are interested in selling your property, or have had difficulty selling it in the past, consider listing it fractionally with <%= COMPANY_SHORT %>. Contact us for professional consultation and representation. We can walk you through the process quickly, set up the legal paperwork, and create or customize a TIC agreement that works best for you.

What kind of property works well for shared ownership?

We have seen examples of successful fractionalized properties ranging from simple to splendid, with share prices running the gamut.

The current market in single and shared vacation homes favors a more luxuriously furnished turn-key product, whether it be a small condominium in a desirable location or a grand mansion on a large estate. A successful seller typically spends about 10% of the asking price to furnish and equip a shared home. In addition to furniture and decor, fresh linens, cookware, serving ware, electronics, artwork, lockers, and sometimes recreational equipment and vehicles are included with the home.

However, not every buyer is looking for this kind of a product. For example, we have had quite a bit of interest in extremely rustic structures on secluded backcountry acreage. Simple and affordable ski cabins and modest summer cottages are still garnering interest, especially from people interested in owning a season-specific half share. Even a private restaurant and retreat overseas has attracted interest. We encourage sellers to get creative; together we may be able to create some lucky person’s dream vacation getaway. The possibilities are limitless.

Why should you list your property with DreamSlice?

DreamSlice is the only brokerage of its kind. People looking for shared properties come to us. We have an in-house attorney with strong negotiating skills who makes sure that your legal agreements are sound and your transactions are safe and secure. Our professional and friendly staff is dedicated to developing far-reaching electronic media opportunities and print ads local to each property as well as in feeder communities and areas that are frequented by people who are likely to invest in fractional vacation homes. In addition to keeping our own database of interested buyers, we cultivate professional relationships with people and companies that regularly provide us with buyer leads. We conduct our own research, keep current on trends, host professional seminars and occasionally publish articles. Our staff thrives on making you successful. DreamSlice customers have the peace of mind of knowing that their business is being handled by smart people and a solid company. Listing with DreamSlice will give your property the exposure it needs to get sold.