Second Home Terminology Redefined
Besting: Better Nesting – an improvement in quality of housing with additional features and benefits. Amenity rich options that afford luxury and levels of comfort or pampering that reach beyond traditional housing.
Future Primary Residence: A second home today, that may or may not generate some rental income, but its primary purchase was for future personal use as a retirement residence. FPR is different from a traditional second home in that it is being interviewed and mentored for the day it becomes a full time home.
Cottage: The home you dream of being at while you are in the office. If home is where your heart is, your heart is up at the cottage, by the lake, overlooking the valley, next to the town, deep in the woods, perched on a bluff with the most incredible sunsets and sunrises from your hammock.
Pied a terre: If your dream home is in a vibrant city center, with the vibe of culture at your doorsteps, then a pied a terre may be in your future. Typically a small, basic housing style – Besting suggests these properties are getting more luxurious in amenities and services.
Traditional Condominium: A cottage with less maintenance and a gardener who trims and weeds while you are back at the office. Legally a condominium is an ownership interest in a block of air, from painted wall to painted wall, and a right to use common areas owned by you and the other condo association owners. This is a form of 'shared ownership'.
Condo Resort Residence: A condo inside a luxury resort, where you get a gardener plus pool boys, valet, and hotel amenities. Condo resort residences are typically not rented as part of the hotel rental program and are often in a separated area from traditional hotel or resort guests.
Condo Hotel: A condo resort residence within a hotel, rented nightly by the hotel management team while you are back at the office. Looks and feels like a condo, with multiple rooms, typically larger than 600 square feet, all amenities and services of the hotel.
Hotel Condo: Legally a condo inside a commercial hotel, looks and feels like a hotel room or suite. Typically smaller than 600 square feet and does not have a kitchen. Often used as a pied Terre, a shorter stay vacation or second home, or a base camp for luxury living. Comes equipped with hotel rental program when you are back at the office or in your other hotel condo getaway locations.
Deeded Timeshare: Shared real or deeded real estate ownership and use rights of real property for a specific period of time. Often in vacation or resort markets. Most often refer to 1/52 share or 1 week of ownership rights. When sold as 1/52 share, the real estate value is often diluted by as much as 50% – ie a furnished $ 250,000 whole ownership condominium, which is converting and sold as timeshare will be sold at $ 9,600 per week ($ 9,600 x 52 = $ 500,000 ). As much as 50% of the retail cost of a timeshare covers sales, marketing and management expenses, because timeshare is more than real estate ownership it is a lifestyle product. $ 10 billion in timeshare was sold in 2006, up from $ 8.6 billion in 2005, this is a booming market.
Un -ened "Points" Timeshare: Same aseded timeshare, except the consumer receives a 'right to use' a property for a specific, typically long-term, period of time – ie 1 week of use for the next 10 years.
Vacation Clubs: Functions similar to a timeshare, club management buy timeshare interests from several resorts and then offers this time to club members. Club members do not get property deeds, but they do enjoy large discounts on vacation housing costs. Clubs are growing in popularity.
Fractional Ownership: Timeshare in larger slices of ownership, and therefore more real estate at a value closer to whole ownership pricing. Fractional is typically to to 1/13 share of deeded real property ownership. Fractional owners get a deeded ownership interest in a particular condo unit or property, when they come for their use time, this is solely the unit they use. 'Why buy a whole pie if you only want a piece?'
40,000 households own fractional real estate, this is only 1% of the top earning households, fractional is poised for substantive growth.
Non-Traditional Fractional (NTF): Fractional shares smaller than 1/13 to 1/26 share. Bigger shares than timeshare, smaller than traditional fractional, 3.5 weeks or 2 weeks of use. NTF is often found in private residence club structures.
Private Residence Club: Fractional ownership in a resort project, with a deed to a particular condo, but with the right to use any available condo in the resort or a number of resorts within the club association.
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