One of the many fast-growing forms of vacation property ownership is fractional ownership. Also known as Private Residence Clubs, fractional ownership is often misunderstood as another timeshare opportunity.

These are not timeshares (a contract that specifies the right to use a property in certain weeks).

Fractional property is real interest, notarized (usually 1/4 to 1/13) – you can sell it, leave it in your will, put it in trust, just about anything you can do with normal titled property you can do with property fractional ownership. The problem is that you can only use it a fraction of the time, hence the name: fractional ownership.

Of course, fractional ownership cannot be confused with full ownership. You cannot redecorate the living room or hang personal photos on the wall. What do you get when you buy a fractional property?

Depending on the location and the type of structure, the owners can obtain a beautiful and high quality property, located in a fantastic location. Property types include: Detached Single Family Homes, Hotel Suites, Cabins, Townhomes, Villas, or an exclusive Penthouse Condominium located in a tropical paradise.

With excellent services and amenities that offer a carefree vacation lifestyle, fractional ownership can typically be purchased for 10 to 15 percent of what someone would normally pay to purchase the home on their own. The burden and cost of repairs and maintenance for the purchase and maintenance of these properties are shared by all buyers of the property. The houses, instead of sitting idle most of the time, are almost always used.

The amount of time you are allowed to use fractional ownership properties varies from property to property. Prices also vary widely and can range from $ 40,000 to over $ 1 million, depending on location, number of weeks, number of rooms, and level of luxury.

Mod cons

Typically offering extensive amenities, ranging from a luxurious clubhouse and spa to five-star hotel services that would not be available with wholly owned vacation homes or timeshares, fractional ownership properties can be an attractive trade-off. for a growing number of vacationers. Additional services offered may include: airport pickups, spas, food restocking, restaurant reservations, and more.

Many fractional ownership properties are operated and managed by highly respected hotel companies known internationally for their first-class accommodations, such as the Ritz Carlton, Four Seasons, Starwood, Intrawest, and Millennium. These are brands with sophisticated and experienced operations and the ability to provide five-star services and amenities. These companies handle routine maintenance issues such as: mowing the lawn, raking leaves, shoveling snow (where applicable), etc.

The possibility of exchanging weeks with other resorts and destinations is another convenience and it is nothing new, an old concept of timeshares. However, for some fractional ownership properties, this concept has been improved. With a permitted use of four or more weeks, some offer the possibility of spending part of the time in a different property in another part of the country or the world. Some fractional properties participate in an exchange program that gives owners the ability to reserve time with other properties that have a similar level of luxury and service.

Rentals

Today, fractional properties are found in many popular vacation spots. From high-traffic ski resorts to warm-water tropical destinations. Many popular fractional properties can also be found in exclusive golf oriented communities.

Appreciation potential

Due to the emphasis on placement in highly desirable locations, there is likely to be substantial appreciation over time. However, appreciation rates vary significantly from one area to another. It is recommended to consult with a local real estate professional regarding the possible appreciation of any investment property.

Prices

Depending on the size, amenities, and location of individual properties, the price of a fractional property varies greatly. A typical price range can be $ 100,000 to $ 500,000 for luxury luxury homes that would cost two to five times as much if purchased outright as a fully owned vacation home. You typically pay a one-time purchase price plus an annual maintenance fee that covers all expenses associated with owning the property and its use and services.

At a minimum, fractional ownership offers many vacationers a choice. The lure of owning a real estate in a luxury property is an appeal to many. While some prices are high, many are an affordable alternative to full vacation home ownership.

Resume

Buyers are advised to shop carefully; homeowners rely far more on operators and managers to protect their investment than they would if they were buying their own home. It is recommended to use the services of a local real estate professional with regard to the possible purchase of any real estate property.

Fractional ownership may well be a fad. But for the foreseeable immediate future, they are here to stay.