A recent article in the local paper read, "Investors put money into homes rather than stocks", recycling the old adage that owning real estate is the only way not to go wrong - emphasis on the word ‘real'. When so many people have lost large percentages of their paper wealth in the recent stock market declines, the benefits of a tangible asset versus a stock portfolio snapshot is brought painfully home.

Not that real estate investment has been painless in the real economy. As a contractor, I have felt the borders of my stable little island receding inward as the tide rises higher and higher. Keeping my feet dry has been altered to keeping my head above water, snorkel in hand, but losses in real estate are generally not catastrophic even in the face of foreclosures. There always remains some reasonable value even in an undervalued market. I recently sold a speculative home that had been sitting empty for more than two years - a beautiful home that I would rather have moved into than lost - and even though I took a financial bath, the loss was not a back breaker and was due to interest on construction money and not depreciated value. Indeed, even in this economy, the home was appraised five percent higher that it had been prior to construction.

So where is the best place to park that former stock market money? A lot of people I know are considering digging deep holes in their back yard and burying PVC bank vaults like the air tubes at the bank teller's more remote lanes. My father-in-law researches the stock market tirelessly - weighing which companies will profit from the stimulus, energy policy, and infrastructure needs - while keeping all of his money safely tucked away in his credit union earning a neat two and a half percent.

Real estate has a lot of benefits and a lot of drawbacks - ownership requires real world responsibility. Rental property can result in headaches beyond description and require either proactive owners or expensive property managers. Unimproved property can be a real crap shoot as far as appreciation potential, and property taxes are often unpredictable.

Vacation property - especially oceanfront property on the Southeast coast of the United States - offers great appreciation gains while enhancing the real world benefit for the family, but maintenance burdens and carrying costs can outweigh the benefits. Leaving a home empty (especially oceanfront property) is not good for the house or for your periodic visits, where you will no doubt spend much of your time playing Bob Vila. While the family lounges on the sand, the only tan you will be getting is under the fluorescent lights of the Home Depot looking over a wide selection of wood grain toilet seats.

Fractional Ownership and Private Residence Clubs may just be the most efficient and cost effective way to own an oceanfront vacation home. Although the concept of dividing the cost and usage of property is not unknown, it has not yet become the standard format for second home ownership on the east coast as it has in the ski resorts of Aspen and Vail, Colorado.

One reason people shy away from a divided interest in vacation property is the similarity to time shares, which have well deserved reputations for poor returns on investment. Like a new car, the depreciation begins at the moment of purchase.

Fractionals and Private Residence Clubs have no such issue. They generally involve very high end luxury vacation property - a multi-million dollar beach front home for instance - which is unaffordable to most and upkeep makes it unappealing for those who might otherwise easily make such an investment purchase.

Fractional Ownership involves dividing the title to a parcel of property between multiple individuals, families, and/or companies. Often the interests are divided thirteen ways, allowing four weeks per year for each owner. Studies have shown that most upper middle class and affluent Americans vacation an average of twenty-eight days per year.

In contrast, Private Residence Clubs keep the property title undivided, which is held by an entity such as a Limited Liability Company. The owners then purchase an interest (or membership) in the company that owns the home. In both cases, expenses and usage are shared equally.

Oceanfront property is in short supply and high demand; therefore, it is very difficult to predict the upper end of the market appreciation for this commodity.