The new buzzword in the overseas property industry is fractional ownership, but what does it mean and how easy is it in the long term?
Whilst doing your research into buying overseas property you can’t have failed to have come across the term fractional ownership but to anyone outside of the overseas property industry this sounds very similar to timeshare. So what exactly is fractional ownership and why should you be considering it?
Fractional ownership allows a group of unconnected buyers to invest jointly in a property. There is strength in numbers, and the more buyers you purchase the property with, the less you need to pay. Fractional ownership is a very straightforward way of owning a property and paying less for the privilege.
So why should you be considering fractional ownership? In addition to the financial benefits, you only need to pay your share of any management or maintenance costs plus you needn’t worry about security whilst you’re not at the property. You get title ownership of a property for a fraction of the cost. Fractional ownership is all about worry-free hands-off property ownership, great for those of us that do not want to be consumed by the day to day tasks of owning and running a property abroad.
Fractional ownership is an established method of purchase. Buyers have been pooling their resources together to buy all manner of luxury items, including superyachts and air travel, since the 1990’s. It’s a tried and tested method of owning items, objects or property that might otherwise be too expensive for one buyer to purchase outright.
So is it like timeshare? No, the main difference between fractional ownership and timeshare, is that with fractional ownership you own part of a title as opposed to just time. You have a tangible asset that appreciates in value as does the property. When buying a fraction of a property, you will be allocated an amount of usage, usually split between high and low seasons. To keep things fair, your yearly allocation will rotate, so each property owner has the benefit of peak times such as school holidays or Christmas breaks. This is where the similarity with timeshare comes in, but the differences are clear.
For example, you can own 1/12th of a property at the five star luxury resort of Halcyon Hills in Samos, Greece. For £22,000 you would own a fraction of a hotel suite, giving you four weeks usage a year. The Developer of this project offers added incentives including a guaranteed rental return of up to 8% of your purchase price, per annum, if you buy for investment reasons only and decide not to use your property. Or 5% guaranteed rental return if you decide to use only two weeks of your allocation.
Comparing the full ownership and fractional ownership purchase options from the above offer, you’d pay £22,000 as opposed to £120,000 for a hotel suite. You’d benefit from the same luxurious facilities including a world-class spa, 35 berth marina, restaurants, tennis courts and gym. Finance and guaranteed rental returns are available for both purchase options, as is the 150% buy-back offer (ending 1st August 2010). The only disadvantage of buying a fractional property over a full property would be the limit on usage you’re permitted each year. However, few property owners actually spend more than four weeks in their overseas property each year.
Fractional ownership is really beginning to take hold in the UK, with more and more overseas developers realising that UK buyers want an easy ownership property, that requires minimal input but maximum gain.
Saturday, June 25, 2011
Friday, June 24, 2011
Fractional ownership is key to K Club future
Fractional property ownership is key to the financial success of the K Club, according to Michael Smurfit, the Monaco-based Irish tycoon who holds a 51 per cent share in the upmarket County Kildare hotel, golf and spa resort.
Speaking to the Irish Independent, which described the K Club as Smurfit's “financial headache.... where losses are surging”, Smurfit said: “It has been difficult, very hard times; the American market has dried up, although it has come back a little bit, but we've just got to stay the course. I have been funding the losses up to this year personally because my partner is unable to do so. But we'll see what happens in the future,”
"We are a very important employer, we employ hundreds of people. It is important to have a flagship like the K Club and I am proud to be part of it. I think we have bottomed; we are forecasting modest growth over the next three to five years, for instance. But if our fractional ownership programme takes off it might be better than modest. I think it is a five- to seven-year project,” said Smurfit.
"We are in partnership with a London-based company, First Light. If that takes off, the K Club will certainly have a strong financial future, but it is too early to call that particular initiative."
Introductory prices for the fractional ownership properties at the K Club range from €131,500 (£108,100) for an eighth share in a two-bedroom apartment (1215 square feet) and go up to €330,000 (£273, 745) for a four-bedroom house (3,800 square feet).
Speaking to the Irish Independent, which described the K Club as Smurfit's “financial headache.... where losses are surging”, Smurfit said: “It has been difficult, very hard times; the American market has dried up, although it has come back a little bit, but we've just got to stay the course. I have been funding the losses up to this year personally because my partner is unable to do so. But we'll see what happens in the future,”
"We are a very important employer, we employ hundreds of people. It is important to have a flagship like the K Club and I am proud to be part of it. I think we have bottomed; we are forecasting modest growth over the next three to five years, for instance. But if our fractional ownership programme takes off it might be better than modest. I think it is a five- to seven-year project,” said Smurfit.
"We are in partnership with a London-based company, First Light. If that takes off, the K Club will certainly have a strong financial future, but it is too early to call that particular initiative."
Introductory prices for the fractional ownership properties at the K Club range from €131,500 (£108,100) for an eighth share in a two-bedroom apartment (1215 square feet) and go up to €330,000 (£273, 745) for a four-bedroom house (3,800 square feet).
Thursday, June 23, 2011
The Benefits Of Having Fractional Ownership Properties
FRACTIONAL OWNERSHIP PROPERTIES are a wonderful form of property ownership. They allow you to partially control several homes around the world. You can spend part of each year living in a completely different climate. It is easier to own property this way than it is to own a separate dwelling.
A fractional dwelling is defined as a vacation home that you only control for a few weeks per year. They come in many different sizes ranging from apartments to condominiums to freestanding homes. You and several different other people control the use of the property. You share it with them.
Living in a dwelling like this allows you to use it as you want for a certain length of time each year. Depending on the company that controls the neighborhood it is in, that length of time can vary from a couple of weeks to a month or more. You will be guaranteed use of the unit for the same period of time every year. You can also apply for the privilege of using it for different weeks in a given year.
Limitations on how long you can dwell in a home each year might seem like disadvantages. There are distinctive advantages to owning property this way as opposed to buying it independently. Many folks find that the trade-offs are worth only getting to live in an exotic local for a few weeks a year.
When you own a unit that is managed by an outside company, they take care of it for you. You will not do any of the maintenance. Company workers will paint it, solve plumbing issues, repair things as they break and take care of anything else that needs to be fixed. You will not have to do any work on the unit at all.
The other big advantage of owning a dwelling for only part of the year is the cost. If you want to experience life in another country, this is a very economical way to do it. Owning a house full time on another land mass is very expensive. This is especially true if you do not plan to be there for an entire year. When you merely want to regularly vacation, it makes sense to control property for only a few weeks at a time.
FRACTIONAL OWNERSHIP PROPERTIES are the right choice for many home buyers. They are shared with other owners and can only be occupied by you for a few weeks a year. You can have a dwelling in an exotic locale without paying a lot of money for it. The company that manages the neighborhood its in also handles the maintenance of it.
A fractional dwelling is defined as a vacation home that you only control for a few weeks per year. They come in many different sizes ranging from apartments to condominiums to freestanding homes. You and several different other people control the use of the property. You share it with them.
Living in a dwelling like this allows you to use it as you want for a certain length of time each year. Depending on the company that controls the neighborhood it is in, that length of time can vary from a couple of weeks to a month or more. You will be guaranteed use of the unit for the same period of time every year. You can also apply for the privilege of using it for different weeks in a given year.
Limitations on how long you can dwell in a home each year might seem like disadvantages. There are distinctive advantages to owning property this way as opposed to buying it independently. Many folks find that the trade-offs are worth only getting to live in an exotic local for a few weeks a year.
When you own a unit that is managed by an outside company, they take care of it for you. You will not do any of the maintenance. Company workers will paint it, solve plumbing issues, repair things as they break and take care of anything else that needs to be fixed. You will not have to do any work on the unit at all.
The other big advantage of owning a dwelling for only part of the year is the cost. If you want to experience life in another country, this is a very economical way to do it. Owning a house full time on another land mass is very expensive. This is especially true if you do not plan to be there for an entire year. When you merely want to regularly vacation, it makes sense to control property for only a few weeks at a time.
FRACTIONAL OWNERSHIP PROPERTIES are the right choice for many home buyers. They are shared with other owners and can only be occupied by you for a few weeks a year. You can have a dwelling in an exotic locale without paying a lot of money for it. The company that manages the neighborhood its in also handles the maintenance of it.
Wednesday, June 22, 2011
Brief History Of Fractional Ownership Properties
Fractional ownership is rapidly growing as an alternative to full ownership of vacation homes. Fractional vacation homes are not a new concept. Vacation homebuyers have, for decades, split ownership and use of second homes to defray costs for vacation properties that are often used infrequently. Historically, the one-quarter fractional vacation home has been the time-tested resort product and has sold successfully for many years to unrelated parties. In these developments, however, services, project amenities, and management are often minimal, particularly at the lower and mid-range of the market.
Within the last few years, a new and refined variation of the fractional vacation home ownership has taken root. This new concept is evolving rapidly with accelerating interest from the market. The new fractional product is an upscale luxury home that often incorporates a private residential club (PRC) to appeal to the affluent buyer at the highest end of the household income scale (Ritz Carlton - Hyatt - Four Seasons). There are also new mid-priced fractional products being developed that are designed and priced to appeal to upper middle-income households.
In response to a desire for more use of an upscale vacation property than is offered by timeshare, but without the cost and responsibilities of a wholly-owned second home, fractional interest in luxury condominiums are experiencing strong untapped demand.
The luxury fractional home buyer can often times afford a wholly owned vacation home, but may have difficulty justifying the investment due to infrequent use. The fractional buyer wants extensive amenities (near a beach, golf coarse or ski resort, a fitness center, club room, barbeque area, luxurious pool, Jacuzzi and landscaping, bikes, kayaks and laundry facilities and hotel services (daily maid service, on-site maintenance and management) that are usually not available with wholly owned homes or condos. The fractional buyer is a repeat visitor to the resort area in which the property is located, often visiting more than once per year. Many upscale fractional ownership resorts have arrangements for reciprocating trading privileges among their owners for like kind facilities at other locations.
Fractional Ownership Properties have a lot of advantages compared to full ownership properties, because they avoid the potential pitfalls of buying for something that you don't use frequently. Please click the link for more information about this Luxury Fractional Ownership Vacation Homes in Mayan Riviera, México.
Within the last few years, a new and refined variation of the fractional vacation home ownership has taken root. This new concept is evolving rapidly with accelerating interest from the market. The new fractional product is an upscale luxury home that often incorporates a private residential club (PRC) to appeal to the affluent buyer at the highest end of the household income scale (Ritz Carlton - Hyatt - Four Seasons). There are also new mid-priced fractional products being developed that are designed and priced to appeal to upper middle-income households.
In response to a desire for more use of an upscale vacation property than is offered by timeshare, but without the cost and responsibilities of a wholly-owned second home, fractional interest in luxury condominiums are experiencing strong untapped demand.
The luxury fractional home buyer can often times afford a wholly owned vacation home, but may have difficulty justifying the investment due to infrequent use. The fractional buyer wants extensive amenities (near a beach, golf coarse or ski resort, a fitness center, club room, barbeque area, luxurious pool, Jacuzzi and landscaping, bikes, kayaks and laundry facilities and hotel services (daily maid service, on-site maintenance and management) that are usually not available with wholly owned homes or condos. The fractional buyer is a repeat visitor to the resort area in which the property is located, often visiting more than once per year. Many upscale fractional ownership resorts have arrangements for reciprocating trading privileges among their owners for like kind facilities at other locations.
Fractional Ownership Properties have a lot of advantages compared to full ownership properties, because they avoid the potential pitfalls of buying for something that you don't use frequently. Please click the link for more information about this Luxury Fractional Ownership Vacation Homes in Mayan Riviera, México.
Tuesday, June 21, 2011
What is the Difference Between Timeshares and Fractional Ownership?
When most people think about timeshares and fractional ownership properties, they imagine paying for the right to a few weeks of vacation time a year, usually in a luxury home or condominium near popular tourist destinations. In reality, there are actually some stark differences between standard timeshare properties and those that are classified as fractional ownership.
When buying a timeshare, investors are purchasing the right to use a property for a specific allotment of “time” each year. They “share” this property with other investors. The allotments may be for one week or longer. In most cases, this does not include any ownership in the real estate; instead, it is typically owned by a development company or other entity. Investors simply own the right to its use. Consequently, they also do not benefit from any appreciation of the real estate or from any of the proceeds if the resort is sold to another owner. Despite this fact, most resort companies also require investors to pay a hefty yearly maintenance fee to cover taxes and upkeep.
Today, many of the most popular timeshares don’t require investors to use their time allotment at the same time every year. Instead, buyers have “floating” weeks that can be reserved by the investors each year based on availability — much like one reserves a hotel room. Some timeshare arrangements include properties in multiple locations, allowing people to choose different resorts in different areas each year, and may even allow people to trade “credits” for use between other resort companies.
While fractional, or shared, ownership properties have similarities to timeshares, fractional ownership offers investors more perks. The major difference is that the investors own a share of the property as well as a time allotment in which they can use it. The number of people who have shares determines the length of time each investor is allotted. For example, if four people each own a quarter share, then the property would be at the disposal of each investor for three months out of the year. Because the investors each own a pre-determined share of the house, they are equally liable for the upkeep and taxes. However, they are also equally entitled to benefit from an appreciated value or proceeds from the sale of the real estate.
Fractional ownership properties are becoming more and more popular. The most attractive benefit of this arrangement is that it allows people to purchase property they may otherwise have not been able to afford. Additionally, the burden of the expenses of maintaining the property throughout the year is shared equally among the co-owners, making the arrangement even more affordable as well as less stressful.
In addition, most fractional ownership properties allow investors to enjoy the property for considerably more time than possible in a standard timeshare. Investors in these properties may choose to live in the property three months out of the year – or for however long their share is worth – or to just have secure lodging during extended vacation times.
Fractional ownership properties may not offer quite the same flexibility some timeshares provide (i.e., “floating” weeks and the ability to exchange credits easily between resort companies). However, savvy shared property owners may instead opt to rent out their share in increments of a week or month. This way, their share ends up paying for itself several times over.
When buying a timeshare, investors are purchasing the right to use a property for a specific allotment of “time” each year. They “share” this property with other investors. The allotments may be for one week or longer. In most cases, this does not include any ownership in the real estate; instead, it is typically owned by a development company or other entity. Investors simply own the right to its use. Consequently, they also do not benefit from any appreciation of the real estate or from any of the proceeds if the resort is sold to another owner. Despite this fact, most resort companies also require investors to pay a hefty yearly maintenance fee to cover taxes and upkeep.
Today, many of the most popular timeshares don’t require investors to use their time allotment at the same time every year. Instead, buyers have “floating” weeks that can be reserved by the investors each year based on availability — much like one reserves a hotel room. Some timeshare arrangements include properties in multiple locations, allowing people to choose different resorts in different areas each year, and may even allow people to trade “credits” for use between other resort companies.
While fractional, or shared, ownership properties have similarities to timeshares, fractional ownership offers investors more perks. The major difference is that the investors own a share of the property as well as a time allotment in which they can use it. The number of people who have shares determines the length of time each investor is allotted. For example, if four people each own a quarter share, then the property would be at the disposal of each investor for three months out of the year. Because the investors each own a pre-determined share of the house, they are equally liable for the upkeep and taxes. However, they are also equally entitled to benefit from an appreciated value or proceeds from the sale of the real estate.
Fractional ownership properties are becoming more and more popular. The most attractive benefit of this arrangement is that it allows people to purchase property they may otherwise have not been able to afford. Additionally, the burden of the expenses of maintaining the property throughout the year is shared equally among the co-owners, making the arrangement even more affordable as well as less stressful.
In addition, most fractional ownership properties allow investors to enjoy the property for considerably more time than possible in a standard timeshare. Investors in these properties may choose to live in the property three months out of the year – or for however long their share is worth – or to just have secure lodging during extended vacation times.
Fractional ownership properties may not offer quite the same flexibility some timeshares provide (i.e., “floating” weeks and the ability to exchange credits easily between resort companies). However, savvy shared property owners may instead opt to rent out their share in increments of a week or month. This way, their share ends up paying for itself several times over.
Monday, June 20, 2011
Finance the Fractional Ownership Vacation Home
Prospective buyers are frequently curious about how to financially arrange for the acquisition of a fractional share of a luxury vacation property. Fractional ownership is a new concept and a lot of conventional bankers are not aware of it. What are the possibilities to finance a fractional property purchase?
There are four primary alternatives for financing your fractional ownership vacation property. The very first, and most straightforward, is cash -– buy your ownership share outright. This is the simplest approach, and maybe the least likely. Most men and women do not have 0K – 0K (or more) in liquid funds.
The second alternative is to utilize the equity in your primary residence. Get a residence equity line of credit (HELOC) and use the proceeds to fund the buy of your vacation property fractional share. This technique has numerous advantages. HELOCs are simpler to get than mortgages; and the interest on the loan counts as a tax deduction as mortgage interest on your primary residence. Of course, you may not have sufficient equity in your primary residence to totally fund the acquisition of your vacation property.
Alternative three is to find mortgage funding. There are a number of financial institutions who market specialized loan products to finance the acquisition of fractional ownership properties. Unfortunately the leading organization providing these mortgage products has just withdrawn their fractional mortgage products as a result of recent challenges in the residential lending business.
According to the Helium Report (March 26, 2008), a periodical covering news in the fractional vacation property industry, First Fractional Funding left the mortgage business after its financial partner, the National Bank of Kansas City stopped underwriting the mortgages.
A number of other companies will continue to underwrite specialized fractional mortgage loans. NextStar Funding, Vacation Finance, and Sterling (MI) Bank and Trust remain viable players in the fractional lending arena. As credit tightens after the subprime lending industry meltdown, purchasers might expect a closer look at their loan applications. Fractional mortgage rates are likely to run 1.25% to 1.5% a lot more than conventional mortgage products.
The fourth choice to finance your fractional ownership vacation property is financing offered by the developer of the fractional project. A couple of fractional vacation residences do make available a self-financed alternative. Normally there is a down payment in the neighborhood of 20% of the total price, and the loan is amortized over a fairly short term (5 years), sometimes with a balloon payment at the end of that period.
If you are able to get owner financing you can make the down payment in cash or by utilizing the equity in your primary residence. This method has the benefit of simplicity and ease, allowing you to complete your buy in a short time and with minimal scrutiny and paperwork.
There are four primary alternatives for financing your fractional ownership vacation property. The very first, and most straightforward, is cash -– buy your ownership share outright. This is the simplest approach, and maybe the least likely. Most men and women do not have 0K – 0K (or more) in liquid funds.
The second alternative is to utilize the equity in your primary residence. Get a residence equity line of credit (HELOC) and use the proceeds to fund the buy of your vacation property fractional share. This technique has numerous advantages. HELOCs are simpler to get than mortgages; and the interest on the loan counts as a tax deduction as mortgage interest on your primary residence. Of course, you may not have sufficient equity in your primary residence to totally fund the acquisition of your vacation property.
Alternative three is to find mortgage funding. There are a number of financial institutions who market specialized loan products to finance the acquisition of fractional ownership properties. Unfortunately the leading organization providing these mortgage products has just withdrawn their fractional mortgage products as a result of recent challenges in the residential lending business.
According to the Helium Report (March 26, 2008), a periodical covering news in the fractional vacation property industry, First Fractional Funding left the mortgage business after its financial partner, the National Bank of Kansas City stopped underwriting the mortgages.
A number of other companies will continue to underwrite specialized fractional mortgage loans. NextStar Funding, Vacation Finance, and Sterling (MI) Bank and Trust remain viable players in the fractional lending arena. As credit tightens after the subprime lending industry meltdown, purchasers might expect a closer look at their loan applications. Fractional mortgage rates are likely to run 1.25% to 1.5% a lot more than conventional mortgage products.
The fourth choice to finance your fractional ownership vacation property is financing offered by the developer of the fractional project. A couple of fractional vacation residences do make available a self-financed alternative. Normally there is a down payment in the neighborhood of 20% of the total price, and the loan is amortized over a fairly short term (5 years), sometimes with a balloon payment at the end of that period.
If you are able to get owner financing you can make the down payment in cash or by utilizing the equity in your primary residence. This method has the benefit of simplicity and ease, allowing you to complete your buy in a short time and with minimal scrutiny and paperwork.
Sunday, June 19, 2011
What Is Fractional Ownership?
Do you like the idea of owning a vacation home in your favorite location, but don’t want the burden and cost of repairs and upkeep? Do you love the services of a luxury hotel but dislike living out of your suitcase? You’re not alone. A new breed of vacation home ownership, called “fractional ownership,” is becoming increasingly popular with busy professionals looking to maximize their family vacation time.
Fractional resorts are real estate developments in prime resort locations on the golf course, ski slope or ocean. They provide the amenities of a luxury home, such as granite kitchen countertops, whirlpool baths and roomy closets — combined with the benefits of a first-class hotel, such as concierge, housekeeping and grocery shopping services. Depending upon the design of the property, residences may be hotel suites, cabins, townhouses or detached homes.
Owners purchase a deeded share in a residence (usually 1/4 to 1/13) that gives them a certain number of weeks per year at the property and use of all amenities. By only paying for the time you use, fractional ownership can be a much more cost-effective way to stay in desirable locations such as Vail, Colo., or Pinehurst, N.C. Prices range widely from $40,000 to more than $1 million, depending on the location, number of weeks, number of bedrooms and level of luxury.
Fractional ownership properties are often called “Private Residence Clubs” and they can now be found at some of the most exclusive resorts in the world — the St. Regis, Ritz-Carlton, and Fairmont hotels all have fractional residence club programs.
Fractional, But Not Timeshare
Luxury fractionals differ greatly from the old-style timeshares. The primary differences are that fractionals offer:
• Deeded property, with the same rights as any other real estate purchase
• Greater chance of property appreciation
• A longer amount of time on property (from 4-13 weeks)
• A luxury level of furnishings, services and amenities
Of course, all of the above perks add up to another major difference: price. The cost of fractional property is quite a bit higher than that of a typical timeshare, though still much less expensive than whole ownership of a luxury home in the same location.
Exchange Weeks and Travel the World
Trading weeks is a great concept from the timeshare days that hasn’t been abandoned but instead greatly improved upon. With four or more weeks to enjoy, owners can choose to spend part of their time at a different property in another part of the country — or the world.
Most 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. Don’t feel like visiting your Caribbean property in the summer? Trade it for a week in the green mountains of Vermont instead. Always wanted to see Italy? Reserve two weeks in a Tuscan villa.
Though getting the location you want isn’t always easy (planning ahead is essential), this flexibility is one of the most exciting aspects of fractional ownership.
No More Living Out of a Suitcase
In the past those who chose to vacation at resorts — because of the services and activities they provided to their family — sacrificed some comfort in a relatively cramped hotel room.
A great feature of most fractional properties is the spaciousness of the residences. With fully-equipped kitchens, large closets and lockers for year-round storage of sports equipment, you truly have all the comforts of home.
Most residences have 2-4 bedrooms and an equal number of baths, so there is plenty of room for family, friends or clients. Many owners purchase more than one fraction to gain even more space and privacy — and time.
Service Sets Fractionals Apart
Personal service is an area where fractional properties clearly outshine traditional second-home ownership. When it comes right down to it, for most people today time is their most valuable commodity. Who wants to waste it cleaning, unpacking, grocery shopping and mowing the lawn?
There are a couple of drawbacks to not owning the whole home, of course. If you have a passion for interior decorating or enjoy taking unplanned, last-minute vacations, you may be unhappy with the limits of fractional ownership. However, fractional properties are one of the fastest-growing segments of the real estate industry, so there are clearly many who find the benefits far outweigh the drawbacks.
As one owner puts it, “My vacation starts the moment I arrive. We head straight to the restaurant for a bite to eat. When we get back to our residence, our refrigerator is fully stocked, our clothes are unpacked and our ski equipment has been pulled out of storage. There’s nothing left to do but have fun.”
Fractional resorts are real estate developments in prime resort locations on the golf course, ski slope or ocean. They provide the amenities of a luxury home, such as granite kitchen countertops, whirlpool baths and roomy closets — combined with the benefits of a first-class hotel, such as concierge, housekeeping and grocery shopping services. Depending upon the design of the property, residences may be hotel suites, cabins, townhouses or detached homes.
Owners purchase a deeded share in a residence (usually 1/4 to 1/13) that gives them a certain number of weeks per year at the property and use of all amenities. By only paying for the time you use, fractional ownership can be a much more cost-effective way to stay in desirable locations such as Vail, Colo., or Pinehurst, N.C. Prices range widely from $40,000 to more than $1 million, depending on the location, number of weeks, number of bedrooms and level of luxury.
Fractional ownership properties are often called “Private Residence Clubs” and they can now be found at some of the most exclusive resorts in the world — the St. Regis, Ritz-Carlton, and Fairmont hotels all have fractional residence club programs.
Fractional, But Not Timeshare
Luxury fractionals differ greatly from the old-style timeshares. The primary differences are that fractionals offer:
• Deeded property, with the same rights as any other real estate purchase
• Greater chance of property appreciation
• A longer amount of time on property (from 4-13 weeks)
• A luxury level of furnishings, services and amenities
Of course, all of the above perks add up to another major difference: price. The cost of fractional property is quite a bit higher than that of a typical timeshare, though still much less expensive than whole ownership of a luxury home in the same location.
Exchange Weeks and Travel the World
Trading weeks is a great concept from the timeshare days that hasn’t been abandoned but instead greatly improved upon. With four or more weeks to enjoy, owners can choose to spend part of their time at a different property in another part of the country — or the world.
Most 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. Don’t feel like visiting your Caribbean property in the summer? Trade it for a week in the green mountains of Vermont instead. Always wanted to see Italy? Reserve two weeks in a Tuscan villa.
Though getting the location you want isn’t always easy (planning ahead is essential), this flexibility is one of the most exciting aspects of fractional ownership.
No More Living Out of a Suitcase
In the past those who chose to vacation at resorts — because of the services and activities they provided to their family — sacrificed some comfort in a relatively cramped hotel room.
A great feature of most fractional properties is the spaciousness of the residences. With fully-equipped kitchens, large closets and lockers for year-round storage of sports equipment, you truly have all the comforts of home.
Most residences have 2-4 bedrooms and an equal number of baths, so there is plenty of room for family, friends or clients. Many owners purchase more than one fraction to gain even more space and privacy — and time.
Service Sets Fractionals Apart
Personal service is an area where fractional properties clearly outshine traditional second-home ownership. When it comes right down to it, for most people today time is their most valuable commodity. Who wants to waste it cleaning, unpacking, grocery shopping and mowing the lawn?
There are a couple of drawbacks to not owning the whole home, of course. If you have a passion for interior decorating or enjoy taking unplanned, last-minute vacations, you may be unhappy with the limits of fractional ownership. However, fractional properties are one of the fastest-growing segments of the real estate industry, so there are clearly many who find the benefits far outweigh the drawbacks.
As one owner puts it, “My vacation starts the moment I arrive. We head straight to the restaurant for a bite to eat. When we get back to our residence, our refrigerator is fully stocked, our clothes are unpacked and our ski equipment has been pulled out of storage. There’s nothing left to do but have fun.”
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