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Fractional Ownership: Time Share RVing by Jaimie Hall

October 2007 Update


2006 Monaco Signature -- $500,000 worth of rolling luxury

Out of the 30 million RV enthusiasts, only a few million are full-time RVers. Most have a house and use their RVs for trips or for travel during part of the year. Their RV may sit unused most of the time.

So, why not rent an RV when you need one? For some, renting does not meet their needs. RV rentals are typically low-end coaches. For the person seeking an upscale luxury coach, the only choice has been to purchase it -- until recently. Now several companies are offering the opportunity to have the use of a high-end coach for a set number of weeks per year at a big savings off the price of buying one outright. (NOTE: Update, February, 2007)

FRACTIONAL OWNERSHIP

Called fractional ownership, this arrangement gives you the use a high-end coach for five to twenty-four weeks of the year with a much smaller investment. For example, at American QuarterCoach, a high-end coach like musicians use on tour is $184,000 for a one-eighth share, plus $7,020 a year in maintenance for five weeks of use. While expensive, this is much less than it would cost to purchase such a rig outright. Not only that, American QuarterCoach takes care of all the maintenance. You can literally bring you suitcase, step onboard, and drive away.

HOW IT WORKS

Once you decide what type of RV you want to own, you contact one of the companies that handles these. You typically purchase one-twelfth to one-quarter interest, putting only a small deposit down until enough interested purchasers are located. Then your share is due. A partnership or LLC is formed. The company takes care of all paperwork, including insurance.

A quarter-share entitles you to 12 weeks of use, while a one-twelfth share equals five weeks. You can reserve time in advance. The company takes care of all maintenance and prepping the RV for each use. They provide 24-hour emergency roadside assistance, training to drive and operate the systems, and usually concierge service. For an additional fee, you can have the kitchen stocked or have the RV delivered to your residence or near your travel destination.

One company, CoachShare, advertises that they make sure everything is perfect for you, right down to the last detail. "We monogram your sheets and towels, set them up in the coach before each trip and launder them afterwards. Your coach includes upscale amenities such as satellite radio, satellite TV, home theater system with surround sound, fine dinnerware, glassware, cookware, barbecue grill, outdoor furniture, and more. We can even stock your refrigerator with your favorite foods and beverages to make your trip more enjoyable."

Typically, a program runs three to five years. At the end of that time, the RV is sold and proceeds distributed among the owners. At that time you can reinvest your share in a similar or upgraded model or cash out. You can sell or trade your shares during the course of the program, too.

GET A LAWYER

Check out the company carefully. Make sure it is financially solid. Involve a lawyer to make sure that purchases made by individuals remain segregated from those assigned to other assets. Also, make sure that the structure of the sale is such that creditors for the company selling the shares can't put a lien on your asset if the seller gets into financial trouble.

Fractional ownership has been used for years for planes and yachts and even for condominiums or vacation houses, called time shares. So why not RVs? For your next trip, you, too, could drive a Prevost or Monoco!

Jaimie Hall
11/6/05

UPDATE, February 2007: Recently Universal Luxury Coaches LLC, which offered fractional sales, went under and the investors lost their money (read the article here). Two executives face fraud and racketeering charges. Be sure to investigate carefully before making any investment and consider waiting until this industry has more of a track record before participating.


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