Fractional ownership offers individuals the opportunity to purchase partial ownership at an extremely nice place, most often in a highly sought after resort area. Sounds a lot like timeshare right? There are similarities between the two types of vacation ownership including:
- Can be bought as deeded properties.
- Can be rented out to others during periods of non-use.
- Right to share among family and friends.
- You have the option to sell at any time.
- Can be willed to kin.
The major difference between timeshare and fractional ownerships is money. Because timeshare is broken down into weekly intervals, it is much more affordable than buying the larger chunks of time required with fractional ownership. Fractional ownership arrangements usually divide time into fourths, eights, or thirteenths, with each owner matched to an equal number of days. Fractional owners purchase their time from a management company that handles maintaining the property and dividing the scheduling blocks. The larger time interval offered in fractional ownership sets prices as about $100,000 or more vs. timeshares costing a little as $2-3, 000.
Another important difference between timeshare and fractional ownership is what the purchaser actually owns. In a timeshare, the owner has rights over units of “time”, whereas in fractional ownership, the owner has rights over his part of the title. This means that if a property involved in fractional ownership appreciates over time, then so do the shares and the shareholder value increases. Fractional owners can sell whenever they see fit and if this is executed during a time of inflated values they will prosper from the capital growth of their investment; this is not possible in timesharing.