The price of a single share of five weeks of cottage ownership varies according to the type of accommodation and amenities, as well as the location of the resort. For example, prices for a fractional cottage at Wolfe Springs Golf and Waterfront Resort near Westport in eastern Ontario, shown here, range from $69,900 to $104,900 for one share of a deluxe, 1,900-square-foot waterfront location. At Blue Water Acres in Muskoka, a five-week share of a smaller 635-square-foot cottage can be yours starting from $35,000. (Photo courtesy Wolfe Springs Golf and Waterfront Resort)

Fractionals offer an affordable way to buy a share
of the millionaire lifestyle in Ontario's cottage country

News Archive BY GARY MAY
Cottage owners know the routine: Head out on the May 24 Victoria weekend to turn on the water, clean up winter’s accumulation of debris, then paint and do all the other necessary maintenance. Come Thanksgiving, they’re back at it, turning off the water, shuttering the windows and getting ready for winter. Then there’s the ongoing upkeep every time they visit.  

Kind of takes some of the lustre off the experience, doesn’t it?  It doesn't have to be this way.

When Gary Bissonette and wife Lynda take the 45-minute drive from their Kingston home to the cottage, they don’t need to worry about cutting the lawn, weeding and washing the windows. There’s no opening and closing necessary every spring and fall. And as active outdoors people, they like to be able to visit their cottage in winter, too. Without a hassle.  

The Bissonettes are part of a growing trend in cottage living: they are shareholders in a fractional (or interval) holiday home.  

Bissonette is a professor of business at Kingston’s Queen’s University. Before buying, he did a thorough inspection of the fraction ownership concept and was so enthralled, he now includes an explanation of how the model works in some of his classes.  

“For the most part, the model is geared toward the ownership of luxury goods,” says Bissonette. “It’s a good alternative to buying something you’re not using all the time.”  

That will resonate with many cottage owners. A real estate survey found that cottage owners use their cottages for only 29 days a year. Yet they pay taxes on the basis of full-time usage, and are left with the full cost of utilities and maintenance whether they are there or not.  

Fractional buyers share their cottage and pay only their portion of the costs. Here’s how a typical fractional holiday development works:  

The title or deed to a cottage, or villa, is divided into 10 shares. Each share entitles a shareholder to five weeks a year – 35 days – in the same cottage. The resort is usually closed for two weeks a year for repairs. Buyers may purchase more than one share if they choose. In exchange, they own a portion of the deed to their unit and are able to sell it, lend it, rent it out or will it to an heir.  

Fractionals are unlike most timeshares, in which you only own the right to use the property, rather than own the property itself, although some timeshares — mostly in the United States — are also deeded. 

Enjoy the cottage experience for as little as $35,000

Details vary among different fractional holiday home developments. Some fractional developers sell a specific week during the summer period – normally late June to Labour Day – then apportion four more weeks during the rest of the year on a rotating basis.   Other programs alternate all five weeks. They allow buyers to select their first year’s weeks – one from each season plus a floater – then alternate each week on an annual basis to give each shareholder a chance at the choicest times.  

The price of a single share of five weeks varies according to the type of accommodation and amenities, as well as the location of the resort. The Bissonettes’ fractional cottage is at Wolfe Springs Golf and Waterfront Resort near Westport in eastern Ontario. Wolfe Springs’ prices range from $69,900 to $104,900 for one share of a deluxe, 1,900-square-foot waterfront location.  

At The Landscapes in the Lake of Bays area of Muskoka, a share ranges from $104,900 to $159,900, depending on the size of the unit and the summer week selected. Some developments offer smaller cottages for lower prices. At Blue Water Acres in Muskoka, for example, a five-week share of a 635-square-foot cottage can be obtained starting from $35,000.  

In addition to the initial outlay, owners are charged an annual fee which normally covers maintenance and repairs, snow removal, grass-cutting and other yard care, upkeep of common recreational facilities, utilities, telephone, Internet, TV, property taxes and insurance. Like a condo association fee, it also covers contributions to a reserve fund to cover future repairs. Depending on the resort and the unit, fees can vary from $1,800 to $3,500 a year.  

A company manages the assets and sometimes looks after renting units during unused weeks.  

Dana McCulloch is one of the principals at Wolfe Springs, an intimate little collection of 15 cottages a couple of kilometres outside the picturesque Rideau Lakes village of Westport. Set on the site of the McCulloch family’s former Green Shingle Lodge, Wolfe Springs welcomed its first residents about four years ago. About 60 per cent of the shares have already been sold, she says.

All the fun without all the chores

“I believe this is the future of cottaging,” McCulloch tells “I grew up on this lake. A lot of children of the original cottagers aren’t showing as much interest in keeping it going. It’s the lack of time, usually. Having a second property to look after is not appealing to a lot of people.  

“With a fractional cottage, you show up to enjoy yourself and when you’re finished, you walk away from it and never think about it again until you come back for another vacation.”  

Fractionals have made luxurious cottages and holiday villas affordable to an income group that would not be able to swing a second home themselves, says McCulloch. Even in eastern Ontario, where recreational properties are much less expensive than on the big lakes of Muskoka, she says basic cottages are typically listed for $650,000 or more these days. “Most people don’t have that kind of money.”  

It’s more likely they’ll be able to use a homeowners’ or personal line of credit to pay $80,000 or so for a fractional. (Mortgages aren’t available for fractionals, but some developers offer their own financing options.) And if going to the cottage is a more enjoyable experience with less hard work, chances are you’ll spend more time there.  

Even those who already own high-end recreational properties are taking a look at fractional ownership. Keith Singleton, senior sales executive with The Landscapes at Lake of Bays, tells the owner of a $3.5-million cottage recently dropped by to check out the fractional concept. “He told me last year his operating costs on that cottage were $100,000, and he hardly used it,” says Singleton. “So he’s thinking about coming here.”  

Singleton says it makes sense when you consider you can buy a five-week interval in a $1-million cottage or villa and access all of the amenities such as the boathouse, clubhouse and soon-to-be-completed fitness centre and pool complex.  

“There’s a lot more available to fractional owners than there would be if they owned their own cottage,” adds Bissonette.  

At Wolfe Springs, for instance, there is a games room, large-screen movie theatre that seats 24, boathouse and dock space where you can tie up your own craft, outdoor fireplace and barbecue area. There’s a fitness room, outdoor games area, plus bicycles, golf carts, canoes and kayaks for owners’ use. In winter, there’s a skating rink. And it’s an easy run over to an adjacent golf course.  

Singleton and McCulloch agree the fractional concept has become much better known recently as more people are exposed to it. “Still, it’s an ongoing educational process,” says McCulloch. “There’s still a misconception that we’re a timeshare. But unlike timeshare, this is an asset you can sell and gain value.”  

Bissonette says the jury’s still out on how good an investment fractionals will turn out to be, because they’re still a fairly new idea. “I’m still not sure how significantly they’ll appreciate. It depends on the market.” He says he would not recommend buying a fractional holiday home strictly as an investment – it’s a lifestyle choice.  

He says his family loves the off-season at Wolfe Springs. They like hiking, snowshoeing and cross-country skiing, and his daughter and her husband find it conveniently located near the Calabogie ski hill.   Typical fractional cottages come fully furnished and air-conditioned, with screened- and glassed-in decks, stone patios, full kitchens with dishwasher, fireplaces and barbecues. Weekly housekeeping is included. Plus you get to use the resort’s recreational facilities. Some allow pets, while others don’t.  

Some resorts offer exchange bonus

The concept of fractional ownership began with the sharing of corporate jets and later spread to property. With any property, the title or deed can be divided into shares, or else a company is formed to hold the property, then sell shares to individual owners. This practice enables the transfer of shares without changing the deed. If the property appreciates, fractional owners benefit from increased value in their shares. They may sell at any time, or bequeath their shares to inheritors.  

In a sense, fractional ownership allows individuals a share in a millionaire lifestyle.  

Fractionals are becoming increasingly popular in Ontario’s best-known cottage areas such as Muskoka, Georgian Bay, the Kawarthas and the Rideau Lakes.  

As a bonus, some fractional plans allow owners to exchange their weeks for comparable accommodation in other countries, and Singleton says that has been a very popular option among buyers at The Landscapes. He says buyers can choose from among more than 200 properties worldwide.  

“A lot of people use it to go to Europe. One recently chartered a private yacht – a 51-foot catamaran – in the Caribbean,” he says.  

As for buyers at The Landscapes, he says most are from the Toronto area, Niagara and west as far as London. Some buyers live outside the country, however, in places that include Ireland, Hawaii, Britain and New York state. “They tend to be people with family in Ontario and are familiar with this region,” he says.  

McCulloch says adding the exchange feature has been considered at Wolfe Springs, but there are currently no plans to do so. Fees would have to be increased to accommodate the added cost. The resort appeals more to those who want to use it as their second home and like it for what it is, she says.  

Bissonette seconds that viewpoint, and says most owners live in eastern Ontario within a two-hours drive of Wolfe Springs. He says he and wife Lynda decided on Wolfe Springs partly because they knew the good reputation of the family who were developing it, and partly because of its location.  

“It’s close to home and we use it as a family gathering place,” he says. “We’re developing our own summer tradition.” With two adult children, and with their first grandchild on the way, the 56-year-old Bissonette foresees many happy years together with his family at this new kind of cottage. — September 2011