Many people ask "what is fractional ownership?" and the closely related question "Is it timeshare? In this article I will attempt to answer these questions. This article is concerned exclusively with the fractional ownership of leisure/luxury assets. However most of the principles would apply equally to the fractional ownership of a practical item (e.g. for business).
Interested in fractional ownership? For fractional ownership schemes to succeed they require skilled fractional ownership management. Otherwise the experience of ownership can be marred by muddled changeovers, sub-standard facilities, and arguments over use.
There are four alternatives for financing your fractional ownership vacation home. The first, obviously, is cash -– buy your fractional share outright. The second option is to use the equity in your primary residence. Option three is to find a mortgage. The fourth option for funding your fractional ownership vacation home is financing provided by the developer of the fractional project.
With the current world financial problems people are finding it difficult to acquire a mortgage for their future investment or even a holiday home. With the new method to purchase home, Fractional Real Estate, potential sales of homes are back on the table.
Vacation homes are the most prevalent use of the fractional ownership concept. Fractional ownership is not a timeshare. The distinction is that a fractional share owner owns a deeded share for a fraction of the property.
Many companies market fractional schemes, but how can you tell whether they are truly fractional ownership? In this article the responsibilities and benefits of various types of fractional schemes are compared.
Fractional Ownership allows you the utilization of the luxury items you want, when you want them -- without the headaches, expense and liability of full ownership. With fractional ownership, a luxurious asset (jet, yacht, vacation home, classic car, vineyard) is owned collectively with a group of other individuals.
Fractional ownership is a growing trend, but how do you go about valuing a fraction in an existing scheme for sale? What rules should be in place in a fractional scheme to prevent potentially disruptive new members joining it?
The potential for fractional ownership to transform life experiences via the lower cost and variety of leisure assets is well know. A subject that is less-often discussed is the likely environmental benefits of widespread adoption of fractional ownership.
Fractional shares (“fractionals”) are sometimes confused with other vacation property options, such as time shares and condo hotels. While there are similarities, there are a number of things that make fractional shares unique, and thus suited for a certain type of vacation property buyer.
Can you save money by using fractional ownership? The marketing of fractional ownership has to date focused on a certain type of development, i.e. super-luxury resorts laden with facilities and services at a very high cost. This isn't all it should be about. In many ways it is potentially more beneficial to people that don't have loads of money.
Some fractional ownership schemes are far away from the true concept of fractional ownership. Some seem to include the worst aspects of timeshare and outright ownership! To explore this further it is first necessary to explain the reasons why timeshare is almost always not a good investment:
This article talks about fractional ownership of vacation properties. It discusses the advantages, and disadvantages of such an arrangement and tells you what to look for should you wish to purchase one.
If you invest in a fractional ownership scheme you need to understand how you are going to get your money back if you need it. This article considers how the contract needs to be worded to achieve this.
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