Located at: 3600 L. Honoapiilani Rd, #G, Lahaina, Maui, Hawaii 96761
David W. Siefker ( R )
Principal Broker
(800)808-9602, or (808)669-7621, or Fax (808)669-5528


The "Shared Ownership" interests

Several oceanfront resorts on Maui are home for a "fractional interest" concept where condominiums and homes are being divided into four to six segments and sold to as many different buyers.  This form of second home ownership has been available in many resort areas on the mainland, and is now gaining popularity as another alternative for resort property ownership in Hawaii.

The current real estate market for resort properties is much different from what it was during the 1980's and 1990's..  As property values have continued to rise in Hawaii, the investors that were active in the market several years ago have now been replaced by people who buy for personal use instead, if.... they can find a property they like at a still affordable price.

There are a variety of units from one bedroom to three bedroom units that are using this plan.  The units that were developed in the last few years under this method have all been sold out and no reales are currently available at this time.   Finally... at the Maui Sands Resort located on West Maui, units are once again being offered for sale on a two month fixed time plan.  Current prices on available inventory range from $50,000 to $160,000 for the two month interests located at the Maui Sands Resort.

Most ownership plans are deeded, exclusive-ownership interests where each buyer receives a deed to a specific property for a specific time period, and an assignment of lease of the underlying property.  In certain properties, the arrangement may also be established as partnership interests that do not have specific use periods.  The program for how individual units are set up are usually dictated by the resorts by-laws on unit usage.

Each owner’s fractional share is separate from the others and can be sold, mortgaged, or bequeathed separately.  Depending on the arrangement of ownership used on each unit, the owner in the unit will enjoy a full two or three months of use each year and have an exclusive right to use the home during their ownership period which is on fixed dates each year. In the partnership form of ownership, each owner may reserve their time for use on a space available basis and the unit usually remains in a rental program to help offset expenses for when it is not being occupied.  For added value and flexibility, some resorts have arrangements made to participate with a vacation exchange company allowing owners to trade time into other resort properties.

It is a practical plan that meets the need of today’s real estate buyer who wants to invest in a second home, but does not need to use it all year long and does not want to invest $500,000 or more for a quality property and have to deal with the issues of having to rent it the rest of the time when they are are not using to in order to help pay the yearly expenses associated withthe unit.

Joint ownership in second homes by friends, relatives or business associates has existed for a long time as a market for second homes. With the high cost of property in Hawaii, we have seen more people recently joining together and buying as tenants in common.   However, this type of joint ownership has had its drawbacks, with arguments about responsibilities for maintenance, who uses it when, and what happens if one owner cannot keep up the payments.

The new Resort Shared Ownership programs have a professional and binding approach to joint ownership whereas an in-place professional management company is designated by the owners’ association of each unit to collect a fixed monthly fee to take care of maintenance and make all required payments.

Although "Shared Ownership" has similar benefits to timesharing, one major difference is the actual real estate values involved. The current new timesharing resorts on Maui have selling prices of $14,000 to over $80,000 a week with 40 percent or more of the purchase price going to marketing costs and only about one fourth allocated to the property itself.  None of the new timeshares being offered offer a fixed time and fixed unit ownership method. They offer only a floating or point system use plan on a space available system whereby the owner has no guarantees of use at their favorite time and no guarantee to which unit they will be in when they return to Maui.

The "Shared Ownership" concept allocates most of the purchase price to the real estate itself with minimal marketing costs. In turn, this enhances resale value and appreciation potential for the Shared Ownership interests since it is more of a tangible real estate interest.

Shared Ownership fills that gap between "whole ownership" of a resort home and timesharing. In the past, we have talked to many people who would love to have a second home here on Maui to use for a couple of months a year, but it usually does not make financial sense for them to buy a whole unit. Renting the unit out while they are not here has proven to be a headache and costly in most cases. Buying eight to 12 weeks of timesharing would also prove expensive in today’s market.

Several resort properties on West Maui have had a limited amount of shared ownership units available in the past.  At this time, the only property with new inventory being developed and available is the Maui Sands Resort.  For additional information on units currently available, contact Maui Beach Properties, LLC.  at   808-669-7621 or toll free at 1-800-808-9602
 

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Email:
 dave@mauidave.com

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