Smart Money Buy USD $249,000 for a 1/12 Share of a Spectacular 10,000 sq/ft $3M Beachfront Penthouse
If you are interested in buying beachfront property in Mexico then the model we are using to give you an education into the world of Fractional Ownership in Mexico is based on the one of the best programs and properties that we have analyzed anywhere in Mexico and other popular destinations around the world where Fractional Ownership is growing in popularity.
The property we have chosen is a beachfront condominium project located in Mazatlan, Mexico named Tiara Sands. This property is being developed by a Canadian based company Oceanside Developments International, the company is very strong financially and they have an excellent track record of success building condominiums in Mazatlan, Mexico.
The Fractional Ownership program for Tiara Sands is structured for a 1/12 Fractional Ownership of a Luxurious Penthouse that has 5 bed rooms and 5 bathrooms a gourmet chef’s kitchen 5691 sq ft that is air conditioned also featuring 6 very spacious balconies totaling 4500 sq ft overlooking the Pacific Ocean, pool and marina. Each share is being offered at USD $249,000.00 with an in-house financing package. The total usable square footage is 10,191 sq ft and that makes this price point exceptional and we have not be able to equal this property in our search for exceptional value for the money invested. This property has every amenity you can imagine and is perfect for the extended family for vacations and holidays.
This article will be the first in a series of five articles to help guide you to a full understanding of Fractional Ownership in Mexico. In this first article we will be highlighting Fractional Ownership in Mexico in the areas that will help you understand the financial advantages this new trend in real estate ownership has. You may very well be surprised that Fractional Ownership meets and exceeds many of the financial demands necessary to be called the proverbial “Smart Money Buy” in today’s fragile economy, especially when purchasing real estate that you will only be using part of the year. Fractional Ownership can be the best use of your real estate investment capital when compared to your actual usage. It is the smart money way to really have a percentage ownership interest in one or multiple properties with reasonable operating and maintenance expenses and it is not a timeshare or a rights of usage contract, it is real ownership with all of the benefits of real property ownership.
Is Fractional Ownership For You?
Why should you even consider “Fractional Ownership in Mexico” as an option to whole ownership? Let’s delve into some of the facts and start the educational process of comparing Fractional Ownership in Mexico to the other ownership alternatives and usage rights in the ever changing real estate markets throughout Mexico and the world. Most people find out while on their quest to purchase real estate in Mexico, that they are faced with several options and obstacles before they can make a buying decision. The biggest decision in this process is to justify the cost of the real estate in Mexico versus their actual usage.
This fact alone has sidelined many would be buyers who can not come to Mexico often enough to justify parting with their cash to buy a home or condominium.
Some of those that do buy real estate in Mexico with the hopes of renting out their home or condo unit and hiring a property management company to handle everything for them….with the hope to defray expenses and then to only find out that they spend a lot of time managing the management company and experiencing high fees for that privilege of wondering if all is well with their property in Mexico. It is not uncommon for some people to purchase on an impulse before they get to know an area very well and then after getting to know that area better they find out that they have bought in an area that would not have been their first choice and they get stuck with a harder resale. With the pervasive economic issues in the USA and the discounted properties in Mexico, right now there is a generational opportunity for the buyers who can act on the best prices and financing that the financially sound developers are offering. With the ever expanding need for the BOOMERS to vest in their retirement and or second home(s) while being bombarding with the political and financial mess in the USA day in and day out, many buyers are acting on the real estate opportunities in Mexico now.
The positive growth of Mexico will soon be pushing the demand for prime properties in Mexico again and it will certainly result in the appreciation of real estate values. The appreciation of real estate in Mexico will be a reality much faster than USA real estate market will see for at least the next 5 to 8 years and it could be 10 years. Many BOOMERS have been out of the market due to the economy and the negative press Mexico has been enduring for the past (3) years and they are not willing to lose more time and miss the best values they will see for many more years to come. With the sensational press now calming down some due to the real areas of concern being revealed, the “Smart Money Buyers” are now lining up to take advantage of the situation. Another good reason is that you could possibly sell your share of the ownership to a friend or family member of one of the other share owners if you want to sell or more importantly if you need to sell. There are other positive aspects, for instance if you want to exchange dates within the ownership pool it is generally an easy task to do by trading or buying extra dates at discounted prices and it is an owner to owner transaction.
Size Really Does Matter
Try this example on for size; let’s say that you have 10 years before you retire and you have the ability, to take 4 weeks per year every one week every three months, or two weeks every six months, Fractional Ownership could be the answer to owning a much nicer property. Imagine going to a 10,000 sq/ft Penthouse totally furnished with the very best of everything and it is valued at USD $3,000,000 and it is yours for just under USD $ 250,000. The amount of time you can afford to use it is the same amount of time you would spend if you invested the same USD $250,000 on a middle of the road 1500 sq/ft condominium. In summary, the time and the money are the same but the size; the view, the furnishings, the enjoyment and the value are not. In 10 years your ability to sell your 1/12 share in a property like this could be better.
Fractional Ownership can be a very good investment if you buy in a financially sound project that has all of “the three L’s” and great amenities. Did I say three L’s…what I meant to say was the four L’s because the fourth L is for “Lifestyle” and that means many different things to people. For me it means convenience to the beach, the pool, the marina, fishing, golf, the restaurants, grocery store, cultural centers, and lastly for me shopping however (shopping is the top of and bottom of my wife and daughters list with restaurants, pool and beach in between).
Tiara Sands offers potential buyers a “try it before you buy it program” allowing you to come to Mazatlan and spend three wonderful days and nights to try out the facilities before you buy. As their guest for the accommodations, you will be able to appreciate the facilities along with their promise of a no pressure sales pitch that really sets this organization heads above the others.
The following FAQ’s and A’s (frequently asked questions & answers), will be a good place to start getting you somewhat informed. In the next four (4) articles we will get more detailed as to why this new trend is growing rapidly worldwide. We will be showcasing why the sophisticated buyer wants the ability to own several properties in different locations, therefore expanding not only the investment opportunity, but the enjoyment of different locations and cultures and for many the different seasons.
Frequently Asked Questions & Answers
- Q. What is Fractional Ownership?
A. Shared ownership that allows a property to be sold in multiple shares to like
minded individuals, rather than being sold as traditional whole ownership.
- Q. Is Fractional Ownership Really Deeded Property?
A. Yes it is, each owner of a share is considered to be “Tenants in Common”, meaning multiple owners of one property. Or, a corporation can own the property and with each owner owning shares in the corporation.
- Q. Are all of the Fractional Owners equal in their rights to sell?
A. Yes, via a legal document that contains the Contractual Rights, Responsibilities and Obligations of all the owners.
- Q. Can more than one family or individual own a 1/12 share?
A. Yes, individuals can form a partnership to control ownership or hold title as tenants in common. It will be up to the partnership to allocate time.
- Q. How much usage can I have?
A. Usage of the property is dictated by the number of Shares of the Fractional Ownership that is based on a revolving calendar.
- Q. How do I book my time?
A. Each owner has one week in a sequential order (1-12) which is then repeated until each owner has selected 4 weeks per share. The rotation will advance each year. When a person prefers more than 2 consecutive weeks, they have the ability to trade with another owner.
- Q. Can I rent my weeks to someone else?
A. Yes, the rental revenue is yours but as an owner you are responsible to ensure the unit is left in the same condition as it was before renting.
- Q. Who will manage the property day to day?
A. Tiara Sands has an on site property manager who ensures that the property is well maintained for the owners, their guests and renters. Tiara Sands also offers special concierge services for owners, their guests and renters. These services are in addition to the HOA fees and maintenance scheduled fees. The onsite concierge can arrange a Chef to cook for you and your guests, pre-stock the pantry, bar, reserve Golf and Sport Fishing and provide many other personalized guest services.
- Q. Does the developer attach additional fees on top of the actual costs of the Insurance, Taxes, and annual maintenance costs?
A. No, not at Tiara Sands and it is this important fact that separates this property from the majority of other Fractional Ownership.
- Q. Is there a Home Owners Association (HOA)?
A. Yes, Tiara Sands has a very good HOA program and the HOA keeps all of the property owners informed of the latest events through a newsletter and dedicated website.
- Q. Is the building insurance coverage included in HOA fees?
A. Yes, the building insurance is covered in HOA fees, as well as the contents insurance that is covered under monthly ownership fees.
- Q. How will maintenance be carried out?
A. A contingency fund will be built up by the ownership group and used for repairs and maintenance as needed or determined by owners and the property manager. There are 4 weeks in the calendar that will be allocated to maintenance. Although these weeks are for maintenance they will be available to owners as bonus weeks. Each 1/12 owner will receive an extra bonus week once every 3 years based on the same draw for the original sequential order.
About the Author: Henry Altman is the CEO of Escapeartist Mexico, a real estate developer & property owner in Mexico and he is the former President of Coldwell Banker Affiliates of Central America.