FRACTIONAL OWNERSHIP

It is not what you may think....

Fractional ownership has become a popular method of owning high end property in such winter destinations as Aspen and Vail, Colorado.  This is not time share ownership where you are contracting time.  Fractional ownership is an historical and well established method of actually owning fee simple luxury property with other individuals.  It is just beginning to make its debut in Hawaii.   

In order to fractionalize property in Maui County, the subject property must be zoned for hotel use.  Meaning there are very few single family residential homes on Maui that can be fractionalized.   Fractionalization more commonly exists in condominium property zoned for hotel use.  Maui County will allow up to six owners to take title on a single property.  

Hawaii is attractively poised for the fractional ownership market.  Unlike winter destinations, Hawaii offers a favorable year round climate.   Investors are just beginning to see the value in fractionalizing a property as some banks will finance up to 140% of its appraised value.  Thus, offering investors an opportunity to capitlize on their initial investment.  At the same time, Buyers are able to afford a higher quality and more desirable property when they have no intention of using it more than a couple of months per year.  Fractionalized ownership enables many buyers to acquire their "dream property" with approved financing and lessen the costs of maintaining the property if it were wholly owned.

Many properties in Maui County cannot be fractionalized.  Therefore,  Before buying any property with the intention of fractionalizing, consult a licensed Hawaii attorney who has the expertise in this area of real estate law.