Dauphin Island Times

While there are currently no plans for any new Dauphin Island vacation condos to be sold on a fractional basis, it's probably only a matter of time before it happens.

There is no denying the basic economic forces of supply and demand. As increasing numbers of people migrate to US coastal areas like 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. 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 in many areas are out of the reach of most prospective owners. It's even happening on Dauphin Island. The two penthouse condo units atop the proposed Capri I condo development on Dauphin Island are listed well north of $1 million. Well north.

Vacation condo developers in other Gulf Coast areas are starting to lower the price of admission by selling fractional shares in the vacation rental properties they're building. Eventually this trend will make it to Dauphin Island. Unlike a timeshare, where owners purchase a right to use a property for a set 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 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 disagreement amongst owners.

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 ¼th share to a 1/25th share. Typically, the units are divided among eight individuals, and each gets a deed for one-eighth ownership. Each owner would get to use the unit for six weeks out of the year.

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