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Adventures In Fractional Ownership

By: Sheryl Smolkin
June 2011

While my husband and I always dreamed of owning a cottage, it just didn't make sense to buy and maintain another property we could only use a few weeks a year. But when we discovered fractional ownership, we decided to finally take the plunge.

Six years ago, we were one of the first buyers to make an offer on one-tenth ownership of a fully-furnished, two-bedroom plus den villa at The Landscapes on Lake of Bays. The deal closed a year later and for $69,900 we got the right to use the unit for five weeks a year.
Every year, each owner has one fixed summer week, plus four floating weeks with rotating priority. Each year we get an eMail listing the floating weeks from which we can make our selection (depending on our priority). Two weeks each year are reserved for property maintenance.

Fully Cleaned
Our week begins Sunday at 5 p.m. and ends the following Sunday at noon. When we arrive the unit has been fully cleaned, there are fresh linens on the beds, and piles of fluffy white towels. There is a washer and drier plus a fully-equipped kitchen including a fridge, stove, dishwasher, microwave, and coffee maker.

Each owner has a locker in the basement where we can keep clothes, sports equipment, and non-perishable food items. When we leave, we empty the fridge, lock the door, and a cleaning crew arrives to tidy up for the next family.

In the first year, the annual maintenance fee was $2,350. By 2010, the maintenance fee had increased to $3,729 inclusive of HST. The increases were based on the increasing cost of propane, electricity, taxes, and cleaning plus a one-time extra levy on ‘pet friendly’ units because they require more upkeep. In addition, over the last few years common facilities such as a club house, a boathouse with a deck over the water, and a fitness room were added.

We are shareholders in resort holders association which owns all of the cottages, other common buildings, and the 20-acre property on which they are situated. Currently intervals in new units the same size as ours are selling for more than $100,000. Owners can sell their interval, but to date the few re-sales have been primarily to existing owners.

All interval owners belong to The Registry Collection and deposit intervals for points which can be used to purchase a week or more at other properties in Canada, the United States, Mexico, and other international destinations. Owners can also privately rent weeks they cannot use.

Adventures in Fractional Ownership

Defray Maintenance Costs
Over the last five years, we have used our fixed summer week every year, but we have never used up the other four weeks. However, we have gone up for long weekends and we have usually been able to defray the maintenance costs by renting out one or two weeks a year. Several years ago, we deposited a week for points and spent a fall week at a lovely bungalow development in Hilton Head, SC.
With the benefit of five years of hindsight, here are some of the things you should consider before signing on the dotted line:

  • Location: Fractional ownership is fairly new concept. There are about half a dozen examples in Ontario that I am aware of. It takes us about two and a half hours to drive to the cottage and we would not have been interested if it was much further away.
  • Management: We took a chance and bought from the plans. We have been very pleased with the overall management and maintenance of our unit and the surrounding property. The developers have been financially prudent and have not forged ahead with additional phases until existing stock has been sold.
  • Financing: Because there are multiple owners, you cannot finance your interval using a mortgage on the property. If you do not have cash, you will need to raise funds from another source such as your home equity or a line of credit. Furthermore, you will be responsible for the maintenance costs each year, whether or not you fully utilize your interval and these costs will go up over time.
  • Arrival/Departure: Our week goes from Sunday to Sunday. The downside is if we can’t stay for a whole week, we can never fully take advantage of a holiday long weekend. For example, if a holiday weekend includes a Monday, we can arrive no earlier than Sunday and we have to leave late Monday to be back at work the next day. However in order to stagger cleaning of the units, the second phase of the development has a more attractive Friday to Friday week.
  • Pet free/pet friendly: Several other fractional ownership developments we considered did not allow pets. Being able to bring our dog along on cottage vacations was important to us, so we immediately ruled out properties that did not have any pet-friendly units.
  • Resale: The development is part way through Phase 2 and five phases in all are planned. It is unlikely that a robust resale market will emerge until the full development is sold out. Don’t purchase an interval thinking you will make a quick capital gain or that you can easily liquidate if you need the money.

Overall, we have been very pleased with our foray into the world of fractional ownership. However, sometimes when the annual maintenance bill comes in I do wonder if it is money well-spent, based on the fact that we have never used all five weeks.
But then I remind myself that renting a similar lake-side property in Muskoka for just one summer week could cost up to several thousand dollars. And if we do retire one of these days, we’ll be able to take affordable vacations for a further four weeks a year either at The Landscapes or other properties in more exotic locations available through The Registry Collection.

Sheryl Smolkin is a lawyer and writer (

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