It is a simple matter of supply and demand. As more and more people migrate to US coastlines such as the Gulf Coast, the demand for retirement or vacation homes and vacation rental real estate increases. And the old song about real estate - they're not making any more of it - has never been more true than along the gulf shores. And in accordance with the laws of economics, gulf coast real estate prices continue to rise. Today the prices of prime, and even not-so-prime vacation rental properties are out of the reach of most prospective owners.
So it's not so difficult to proclaim that sooner or later this was bound to happen. Now developers are starting to lower the price of admission to your Gulf Coast Paradise by selling fractional shares in the vacation rental properties they're building. Unlike a timeshare, where owners purchase a right to use a property for an amount of time each year, ownership of a fractional share of a vacation condo unit means you own a fractional share of the property, deed and all. The property is operated by a separate management company who furnishes and manages each individual vacation rental condo.
Not a bad idea if you think about it. Roll-your-own fractional ownership - the kind you get into with friends and family - can be difficult to manage on a long-term basis. Relinquishing control of operations - and choice of drapery colors - to outside management, albeit for a price, is a great way to avoid issues such as these.
New condominium project will offer buyers 1/8th shares in units
Stacey Ryals is targeting the vacation renter for his condominium project, Soleil, off Alabama 59 in Gulf Shores.
Emerald Grande's 281 units in HarborWalk Village in Destin will appeal to second-home buyers, according Ed McMullen Jr. of Legendary in Destin.
Though the projects are different in nature, they share one similarity: Both developers are selling fractional shares of the units -- 1/8th shares.
Ryals' 144 condo units will sell for $79,900 for a 1/8 share, with the penthouse units priced at $119,000 per share. The project will be built at the site of the Sawgrass Landing retail center with views of Lake Shelby, the Gulf and Little Lagoon.
The Emerald Grande units overlooking Destin Harbor range from the $200,000s to several million dollars per share.
Fractional ownership has become popular in Destin and several other coastal cities in the Panhandle, agents said. Fractional units can range from a