usvi-on-line
Group villa ownership - possible?
Group villa ownership - possible?
Had an idea pop into my head just now that I thought I'd toss out to the forum for feedback.
Since we all have a fondness for St. John I was wondering what the feasibility of all of us getting together to actually buy a villa on St. John would be. Alone, there probably aren't many of us who could afford a house on St. John but if we pooled our money together...
Any thoughts?
Since we all have a fondness for St. John I was wondering what the feasibility of all of us getting together to actually buy a villa on St. John would be. Alone, there probably aren't many of us who could afford a house on St. John but if we pooled our money together...
Any thoughts?
A mind is like a parachute. It only works when it's open.
-
California Girl
I like the idea, but as someone who has a business partner remember that if you do it it's a business. Get every possible contingency in writing and run it by a good lawyer!
It sounds petty and cold but ultimately it nips stupid problems in the bud, especially when you get the inevitable personality clashes.
-Sandy
It sounds petty and cold but ultimately it nips stupid problems in the bud, especially when you get the inevitable personality clashes.
-Sandy
It would definitely need to be set up and run as a business or limited partnership. With many people come many problems, but if it was set up properly with contracts and such, wouldn't it be cool to own a "share" of a house on St. John that you would be able to stay at and not have to rent? I guess it would be kind of like a timeshare, but more like a private timeshare that you would own with people you know and who you know will have a vested interest in making sure the house is taken care of properly.
I'm sure there has to be something of this sort that has been done before. Any real estate people or lawyers want to chime in?
I'm sure there has to be something of this sort that has been done before. Any real estate people or lawyers want to chime in?
A mind is like a parachute. It only works when it's open.
Others seem to have implemented this concept:
http://www.cruzbayrealty.com/details.ht ... ber=07-274
http://www.cruzbayrealty.com/details.ht ... ber=07-400
Ali~
http://www.cruzbayrealty.com/details.ht ... ber=07-274
http://www.cruzbayrealty.com/details.ht ... ber=07-400
Ali~
STJ - I "get it"
This would be easy if there were no people involved... like accounting without taxes or physics without friction.
I'm going to wait for global warming and fuel prices to take their course.
Weeks at the Westin start at $9,500. There are some villa timeshares on island as well. Pia knows...
Cheers, RickG
I'm going to wait for global warming and fuel prices to take their course.
Weeks at the Westin start at $9,500. There are some villa timeshares on island as well. Pia knows...
Cheers, RickG
S/V Echoes - Coral Bay - St. John, VI
Good thought, but that would be kind of expensive. We usually only spend about 2K per week for the villa. Even if you don't take a loan for the 33K, you have to count the interest that money would have made if you had left it in a CD - lets say at 3.5%. That's $1155 a year. Add to that the (approx.) $500 fee mentioned above and we're up to $1655. Depreciate the 33K over maybe 15 years - $2200 per year(week) and we're now up to $3855 for the week's 'rental'. I dunno - maybe if it's a big villa and you have other couples to share the cost......
I'm a commercial real estate attorney, so I can give some insight, though my knowledge is somewhat limited b/c I do absolutely zero residential or condo work.
My biggest concern about this is a practical one - what happens when one partner wants out, dies, etc? How do you "sell" a fractional ownership on the secondary market? How do you price this ownership - get an appraisal each and every time to determine fair market value? What happens if the heir or purchaser is a difficult personality that makes decisions difficult?
Also, since this is really an investment for people, it's a bit different than buying a timeshare. A timeshare generally depreciates in value, especially if you buy it new (trust me, I've done the research). A home in theory should appreciate... and I would think greatly on St. John over a 20 year period. How would you ever recoup your investment? Would the group at the outset agree to sell in ____ years? How would that affect new people who bought in?
As you can see, there are more questions than answers. I think this idea is great in theory, but I think it would only work with a small group (4 or so) of very financially secure individuals who were determined to see the house through for around 15-20 years, regardless of life changes.
That being said, if I found the right group and put an agreement in writing, I'd be willing to do it. You just have to think through everything beforehand.
My biggest concern about this is a practical one - what happens when one partner wants out, dies, etc? How do you "sell" a fractional ownership on the secondary market? How do you price this ownership - get an appraisal each and every time to determine fair market value? What happens if the heir or purchaser is a difficult personality that makes decisions difficult?
Also, since this is really an investment for people, it's a bit different than buying a timeshare. A timeshare generally depreciates in value, especially if you buy it new (trust me, I've done the research). A home in theory should appreciate... and I would think greatly on St. John over a 20 year period. How would you ever recoup your investment? Would the group at the outset agree to sell in ____ years? How would that affect new people who bought in?
As you can see, there are more questions than answers. I think this idea is great in theory, but I think it would only work with a small group (4 or so) of very financially secure individuals who were determined to see the house through for around 15-20 years, regardless of life changes.
That being said, if I found the right group and put an agreement in writing, I'd be willing to do it. You just have to think through everything beforehand.
I've thought about this too.
I'm open to buying a house across 4 people providing we start with something less than $1.7M. (I've got two kids to put through college yet.)
Each family gets 2 weeks use each year, plus additional weeks at a reduced rate. Other weeks are rented out just like any other villa with a discount for forum members, of course
Where do I sign up?
I'm open to buying a house across 4 people providing we start with something less than $1.7M. (I've got two kids to put through college yet.)
Each family gets 2 weeks use each year, plus additional weeks at a reduced rate. Other weeks are rented out just like any other villa with a discount for forum members, of course
Where do I sign up?
I kind of thought some of the houses on STJ may run in the red. However, I look at it as buying a retirement house with other people's money (or mostly other people's money). Eventually, the mortgage is paid off and you own it. Even if you run in the red, you still only paid a fraction of the house with your own money.
I'm not sure how the "Fractional Timeshares" work that are on the Cruz Bay Realty site. It looks like you pay for a month that you own, but I can't tell if that's just a one-time payment (and then you pay a "Condo Fee" which is monthly???) or what. Does that mean you own 1/12th of the house? Do you have any ownership in the actual real estate? I requested more info from them. Is there anyone here who knows how those work? I would think that as the house appreciates, your 1/12th that you own would be worth more when you decide to sell.
I'm not sure how the "Fractional Timeshares" work that are on the Cruz Bay Realty site. It looks like you pay for a month that you own, but I can't tell if that's just a one-time payment (and then you pay a "Condo Fee" which is monthly???) or what. Does that mean you own 1/12th of the house? Do you have any ownership in the actual real estate? I requested more info from them. Is there anyone here who knows how those work? I would think that as the house appreciates, your 1/12th that you own would be worth more when you decide to sell.
A mind is like a parachute. It only works when it's open.
Never mind...I looked into it a little more. Even if the "condo fee" was annual, that's the cost that kills it. Even if you were to buy into it and rent it out for the entire month you own and never actually used your share, it would take forever to pay off (if my math is right) and then you'd still only "own" 1/12th. Doesn't seem worth it.
Anyone here have any experience with these things? I guess my best chance to own a piece of paradise is to win the lottery!
Anyone here have any experience with these things? I guess my best chance to own a piece of paradise is to win the lottery!
A mind is like a parachute. It only works when it's open.