Fractional Ownership Ranches
Fractional Ownership, also known as Tenant-in-Common (TIC) is a form of ownership of real estate. Under this co-ownership structure, people will have an undivided fractional interest in a whole property and share their share of the net income, tax benefits, and appreciation. In addition, they will receive a separate deed and title insurance for their percentage ownership of the property and will have the same rights as a sole proprietor.
Fractional ownership is not a new concept. In fact, it has been successfully applied to various industries, including yachts, airplanes, tourist condominiums, and luxury real estate for second homes. The resort industry is entering a period of explosive growth, and luxury fractional resort products are becoming a more important and recognized component of this industry. According to Omni Brokerage, Inc, ICT real estate investments exceeded $4 billion in 2005. Additionally, it has become the preferred investment vehicle for real estate investors who want to defer capital gains through a 1031 exchange and own real estate without the management headaches.
Fractional ownership typically ranges from 1/4 to 1/13 shares. The richness of the location and the length of the season determine the size of the turnout. Most of the recently completed fractionals are located in the Rocky Mountain ski areas, but the concept is rapidly spreading to other popular domestic tourist destinations in the United States, the Caribbean, and Mexico and other international vacation spots. Fractional ownership stock prices vary widely and can be influenced by several market factors, including unit size, number of owners, location, amenities, and available supply. Typical share prices range from $100,000 to $500,000, but can easily exceed $1.0 million for high-end Private Residence Clubs (PRCs).
Fractional Ranch Ownership
Ranch Partners, LLC is bringing the concept of fractional ownership to ranch real estate. We have found that the price and responsibility of total ranch ownership exceeds the wishes and expectations of most of our clients. By packaging the ranches into fractional ownership, we are able to serve a significantly larger group of investors and provide a luxury resort experience, while continuing to preserve the ranching heritage of the West. All owners will have access to the ranch for 4 seasons, from 8 to 12 weeks of luxury accommodations and unlimited use of the ranch’s recreational facilities and services.
While all fractional ranches have access to outstanding recreational activities such as hunting, fishing, hiking, and horseback riding, individual ranch properties can be developed to suit a variety of ownership lifestyles. Some ranch-style properties may suit the owner of a luxury resort, with high-end accommodations, full-service management, and a variety of amenities similar to private residential clubs. Other fractional programs can be designed around ranch operations. These programs provide the owner with the opportunity to live and play on a working ranch. Accommodations are much more conservative, lifestyle is more rural, and activities are related to ranch operations, including horses, cattle, farming, and ranching.