Every year, vacation homeowners’ second-biggest asset is sitting empty for 44 weeks, or nearly 85 per cent of the time, based on average industry figures.
Toronto-based resort industry veteran Gary Carter wants to change all that. Resort Owners Group (ROG) has developed an ownership model he claims offers the attributes of both whole ownership and factional ownership to resort property owners.
So what’s different? Flexibility and simplicity. It offers a number of tweaks on the traditional time share model to make it more appealing to buyers and resort operators.
For prospective owners, the ROG system allows whole or fractional ownership (an eighth, a quarter, a half, or whole ownership), management of maintenance, repairs, security and upkeep, as well as administration up to and including resort home reservation for personal use, exchange management, rental bookings and collection and disbursement of rental income.
As well, owners can exchange their allocated weeks for time within their ROG communities or for homes in other ROG-managed communities. (This would allow an owner, for example, to secure multiple properties in a Resort Owners Group community for an extended family gathering or for a golf tournament with friends or business colleagues).
The keep-it-simple model takes care of furnishing the properties, as well as providing purchasing support at the beginning – such as offering financing and legal/paperwork assistance.
So far, the company has eight properties in its group: three in U.S. golf/sun destinations and the balance in Canadian ski/golf hotspots.
“It is really a liquidity model for second home ownership,” said Carter.
Becoming more expensive
Blame the boomer bulge for the soaring cost in vacation home properties as they gear down from a lifetime of work to a life of retirement and leisure.
According to figures provided on Resort Owners Group’s website, the average cost of a vacation property has doubled over the past decade to between $500,000 and $600,000.
Fractional ownership and handy financing helps alleviate the challenge of affordability when prices are going the wrong way for buyers.
One wrinkle the company offers prospective purchasers is the ability to make an assembled ownership purchase (say four golf buddies buying one quarter each or three friends splitting ownership with one holding a 50 per cent share).
Pitching to developers, too
Carter is currently pitching his model to vacation property builders and developers, who he noted (while speaking via a phone interview from a resort property in Mexico), have similar issues with regard to affordability and flexibility as potential resort owners.
“It is a model for developers to create a more affordable product. I can put it in place in four weeks. You might spend $500,000 or more on trying to figure out a solution. But I have the best templated solution for uses that is unlike any other.
“It took me 10,000 hours to figure it out but now I have figured it out and it doesn’t change from project to project. It is generic and allows developers to jump into the fray and start marketing the second homes when in the past they were never able to do it.”
Carter noted there were at one time 175 different fractional ownership models, each with its own unique flaws and benefits.
The difference with his licensed system, he claimed, “is it allows full ownership and fractional to co-exist which is very important.”
Carter said his unique background in merchant banking and technology as well as the leisure property market gave him the insights to develop what he describes as a one-of-a-kind model.
“I realized one of the most important things was to create a solution that could be scaled,” he said. “If you were a developer in Kelowna and you were a lawyer and trying to figure out a solution, you only had that one project, you were going to be tied up for years.
“But if you created one really good operating system for managing second home ownership, which is really what I was doing, it is like the Microsoft operating system for usage, and exchangeability and ownership.”