Is Fractional Real Estate Ownership Different Than Timeshare?

May 24, 2012 / Russell Legato, Residential Property Analyst

You may wonder if real estate ownership is just timeshare under a different name. It is a new kind of vacation home plan for shared ownership. It isn’t possible to spend a great deal of time in your vacation home. Thus, it is preferable to pay only part of the total cost of that property. The purchase cost is divided among a group of owners and all are entitled to vacation there at scheduled times.

Is Fractional Real Estate Ownership Different Than Timeshare?

Many think it is more practical to share ownership and all the costs connected with owning property. A fractional ownership is different from a timeshare because it has fewer owners. This allows more time for each owner to spend staying in the house or condo. The properties are located in upscale destinations, such as Paris, New York City or Hawaii.

Only expensive homes are offered by developers and high-end resorts. Single-family homes are a small percentage of this market.

The groups of buyers can include from four to a dozen people. A potential buyer should do the research to determine such things as cost to purchase, cost to maintain, how conflicting buyers would resolve any problems and if resale is a feasible option if they are unhappy with the fractional ownership situation. Evaluate the track record of the seller or the person who arranges the purchase and all legalities involved.

If some of the buyers are from another country, determine in what legal system problems would be resolved if the conflict became serious at any time. Finally, make certain the cost of monthly bills is affordable for your vacation budget.

It is crucial to know how those who are inconsiderate and break rules are dealt with. Your vacation time should not be burdened with having to handle one of the owners being in residence during your allotted time, or leaving the place in less than pristine condition when they leave.

Fractional real estate ownership should add pleasure to your life, not problems.

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