Why Deeded Fractional?
The traditional model of wholly owning a vacation home has become outdated. The notion of managing a second property—dealing with the hassle of annual maintenance and renting it out during unused periods—is far from the idyllic dream it once was.
In the 80s and 90s, the allure of owning a vacation home in sought-after markets like Los Cabos, Mexico, was heavily romanticized. The prevailing pitch suggested that a secondary or even tertiary property could be a source of passive income, renting it out when not using it.
However, as we ventured into the 2000s, the gloss of this ideal faded. The reality set in —owning a second home, particularly abroad, is a considerable investment of time and resources. Affluent individuals who could afford multiple properties found themselves lacking the time or inclination to manage them effectively. Moreover, most second home owners use their second homes only 3 to 6 weeks per year.
In the modern context, deeded fractional ownership has emerged as the most logical solution. It caters to the discerning buyer who is likely to use the property at specific times of the year. Why own and be burdened with the cost and maintenance of all of it when you can own and maintain just the part you'll use?
And like all real estate, The Coveted Group’s fractional owners enjoy the upside of realized equity as the values of their fractional assets grow with the market. This ensures growth in their investment and presents a promising exit strategy when they decide to sell, benefiting both the owners and their heirs.
Deeded fractional real estate ownership is practical—it aligns with how you live. You own the property for the weeks or months you need it. This pragmatic approach to luxury is why fractional real estate has surged in popularity over the last decade and continues to gain traction.
Beware: Not All Fractional Ownership Is Equal
It's crucial to differentiate between genuine fractional ownership and timeshare. True fractional ownership involves co-owning deeded real estate—an appreciating asset, not a timeshare, which is often a financial liability. Authentic fractional ownership grants you a deed; anything less is a timeshare in disguise. Beware of 'floating fractional' models—they lack the certainty of fixed usage and can resemble timeshare schemes more than true co-ownership. Something else to be aware of —always ensure that the deed included with your fractional ownership corresponds to the actual property you intend to purchase, not a different one.
Client-Endorsed Advantages of Deeded Fractional Ownership by The Coveted Group
Relish ownership of a luxury multi-million-dollar home without the burden of sole ownership and maintenance.
Benefit from the flexibility to rent out your allocated time for profit should your plans change, or you decide to explore new destinations.
Enjoy a turn-key experience: arrive, stay, depart, repeat.
Convert non-performing savings or underperforming investments into a tangible asset that provides enjoyment and the potential for appreciation.
Generate annual income by renting out your weeks or months.
Establish a home base in a cherished vacation spot for annual gatherings with family and friends.
Secure fixed ownership of your selected destination and time each year, creating predictability and continuity in your vacation traditions. For instance, owning January 1st - 14th means that those weeks are yours every year, indefinitely.
Discover a cost-effective alternative to expensive hotels or short-term rentals.
Own a share of a legacy asset, something of enduring value to pass on to your heirs.
Exit strategy —you can always sell a deeded fractional asset, often for a profit.
Deeded fractional ownership by The Coveted Group is an intelligent, modern approach to owning a piece of paradise.
Reuters says, “People who buy a second home for vacation generally only use it for three or four weeks a year. The rest of the time, it’s sitting empty, or they must pay a management company to handle rentals and maintenance. If you want to spend $200,000 on a holiday home, you could spend that on a fractional ownership property and buy into a $2.5million property for the equivalent price.”
Forbes says, “Fractional ownership is cheaper than rent in the long run. Moreover, you can sell your fraction—possibly for a profit—in the coming years.”
CNNMoney says, “These are not timeshares. Fractional ownership, you can sell, leave it in your will, gift it; they can even be a good investment.”
Realtor.com says, “Although fractionals are similar to timeshares, in a timeshare, the owner has purchased a period in which to use the property; a fractional owner owns a slice of the property itself. Expenses like property taxes and maintenance are shared across the owners, as is any rise or fall in the property value.”—read more here.
Derrick Grahn, Founder and CEO of The Coveted Group, is known for transforming Los Cabos' real estate and hospitality landscapes. With roots as a Chicago designer and entrepreneur, Grahn pivoted to real estate with a flair for creating unique experiences. His venture in Mexico's luxury magazine circuit, with Cabo Social Magazine, preceded the inception of The Coveted Group —a pioneering authority of deeded fractional real estate and bespoke community projects in North America. An artist alumnus of The School of the Art Institute of Chicago with business savvy, Grahn's legacy blooms from Flora Farms to innovative property developments, marking him a dynamic influencer in luxury real estate innovation. Beyond The Coveted Group, Derrick Grahn also co-founded and designed Casa Blanca by Coveted, co-founded the all-natural skincare line Santo Cabo, and founded, designed, and built the Outpost restaurant in Cabo San Lucas —further illustrating his versatility as a concept-driven entrepreneur.
“The Coveted Group’s niche is deeded fractional real estate, offering owners a titled asset that can be utilized, rented, or sold. They are currently involved in projects on Cabo’s East Cape, a 120-acre farm in Wisconsin, a 200-acre butte in Arizona, a 400-acre ranch near Baja Sur’s Todos Santos, and beyond.” —USA Today
“Every Coveted Group project is an artistic masterpiece where nature, architecture, and creativity converge to form landmarks intended to stand the test of time.” —Yahoo! Finance
“Valued in the hundreds of millions, The Coveted Group recently secured a significant endorsement and investment of $8.5 million from Aktiva Capital—a private investment fund based in Mexico City—and its partners. This investment kickstarts The Coveted Group’s vision of crafting an unparalleled residential experience at Nine Palms Ranch, aligning with the global demand for personalized, home-centric vacation home ownership, a market anticipated to reach $36 billion by 2031.” —Business Insider