Interval Ownership in the Long Beach Island Real Estate Market
Long Beach Island Real Estate
In this blog, I will give you an overview of interval ownership in the LBI real estate market and then cover some of the pros and cons of this form of ownership. Interval ownership on Long Beach Island is a blend of ownership between condos and a timeshare. Like a condo, a management company oversees the maintenance of the property. The property owners make all the decisions for the property, and each owner has an equal vote. The management company includes cleaning the unit between owner stays, general property maintenance and repair, management of the owner’s use periods, collection and distribution of the funds to pay the taxes, water bills, etc. The management company sets the schedule and decides who will use the property and when. Each owner uses the property for 10 weeks of the year. The time is divided up generally, with each owner receiving two prime summer weeks, two spring weeks, two fall weeks, and three winter weeks, thus ensuring that the owners can use the house all year long. The extra two weeks are dedicated to property maintenance and for any significant repairs.
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
Long Beach Island Real Estate Interval Ownership
Like any form of ownership, there are pros and cons. Interval properties tend to have lower rates of returns than the rest of the LBI real estate market, making them less attractive investments. They also cannot be mortgaged (unless a bank is willing to grant special permission, which I have never seen), so they must be paid for in cash. Of course, you could pull money from another source, like a home equity loan, but the building typically cannot be used as collateral. For this reason, sometimes buyers prefer to purchase a condo with the cash they would have used for the interval property and assume a mortgage for the balance. Lastly, there is a relatively high cost of ownership each month, even though it does cover everything! On the pro side, it is about as maintenance-free ownership in the LBI real estate market as possible. The management companies take care of nearly everything, and you get to use the property several times throughout the year. One popular strategy is to rent the 2 prime summer weeks to more or less cover the annual cost of ownership and use the property for the rest of the year. This allows an owner to have a beach house on Long Beach Island and avoid the worry and day-to-day dealings of home ownership. Some owners will buy more than one share in a building, giving more use for themselves or as a rental. Given that many buyers in the LBI real estate market only use their homes for a few weeks in the summer, buying an interval ownership property grants the same usage at a far lower cost.
Interval Ownership in the Long Beach Island Real Estate Market
Buying real estate on Long Beach Island is a significant investment, and all home buyers should understand the pros and cons of each type of property. Single-family homes dominate the market and are the most expensive, but they provide the best appreciation and long-term investment. Condos lag behind single-family homes from an investment point of view, but they are much less expensive. Interval is a blend of the two concepts offering affordability and personal use, but buyers in the LBI real estate market need to understand this form of ownership to make sure it is right for them. For more information about Long Beach Island or about the LBI real estate market please do not hesitate to contact me.
By : Nathan Colmer | LBI Real Estate Agent | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market