In today’s economy, many luxury homeowners and would-be purchasers have changed financial habits since the onset of the recession. For the consumer who does not wish to compromise lifestyle, owning 50 percent interest in a second home makes more sense now than ever.
What is 50 percent Co-Ownership?
The concept is simple. Two owners each purchase a half interest in a resort home. It’s best explained by using an example: Let’s say you have a $5 million home and are carrying a $2.5 million debt, and you sell 50 percent interest for $2.5 million. You are now debt-free and responsible for only half the cost of maintaining the home. You can sell the remaining 50 percent interest now or at your leisure, if indeed you choose to sell at all.
What are the benefits to each?
There are numerous benefits, but foremost the buyer is thrilled to have purchased a $5 million home for $2.5 million. It’s a chance to buy twice as much home for half the price. The seller of the 50 percent interest gets to continue enjoying the home at half the cost as well, while freeing up substantial cash to either pay off the mortgage or invest the cash elsewhere. Realistically, neither party will probably ever use the second home the full six months.
What services do you offer?
Co-Ownership Solutions is a firm specializing in marketing 50 percent interests in Hawaii’s luxury second home market. We work as an intermediary to expertly profile sellers based on a unique set of detailed profiling criteria and match well-qualified co-ownership buyer candidates, resulting in a customized, comprehensive Coteancy Agreement. Our agreement is extremely thorough. All details are clearly defined and cover just about every scenario imaginable, from the management of the property to default provisions that govern the partnership and protect each co-owner. The agreement is completely customized based on each co-owner’s needs and preferences, thus resulting in a well-defined, harmonious partnership between the co-owners.
Why not just buy a timeshare?
In my research, traditional shared ownership like timeshare and fractional do not work in the luxury market. Owning 1/6 interest or a few weeks out of the year does not provide enough ownership to be deemed a legitimate asset, and it becomes very complicated with multiple owners, where two owners are easy to match and address liability issues.
What does the future hold for 50 percent co-ownership in Hawaii?
The 50 percent co-ownership concept already is popular for other luxury assets, such as yachts or private aircraft. With the recent economic changes, it’s now crossed over into resort homes as well. On average, a second home sits vacant 300 days out of the year. The cost to maintain them is expensive, even when sitting empty. Today’s consumers are having a hard time justifying such substantial cost for such little use, yet still do not wish to sacrifice lifestyle
This company was founded on a strong desire to provide a new solution for buyers and sellers of real estate in Hawaii. Fifty percent co-ownership maintains lifestyle while providing each co-owner with a legitimate asset. With over $50 million in 50 percent co-ownership inventory, I believe our company has a big future in Hawaii.
Contact Co-Ownership Solutions for information on luxury properties.