What is fractional ownership?
Fractional ownership vacation homes are something that has been around for years but has
just now hit the investment real estate market (i.e. vacation homes, townhouses, condos,
etc). For years business men and women have been using the fractional ownership technique
to purchase everything from private jets to expensive jewelry.
Fractional ownership broken down basically means that you and a group of people (often
times friends and family) pool your resources together to purchase an otherwise expensive
product. This tactic makes investments have a lower risk and to most of us this is a better
aspect in investing.
Fractional ownership works very well for the family that wants a nice vacation home to call
their own. Although, is geared toward the individual that does not want to spend $400,000 on
a place they will only use a few weeks out of the year. If you are only planning on using the
vacation home one month out of the year, do you really want to pay the mortgage and upkeep
costs the other 11 months of the year? This investment strategy is a wonderful choice for
those cash conscientious investors.
This product is then split up evenly among the investors where each investor owns an equal
fraction of the investment. With vacation homes this means that each investor has either one
or two months to use the vacation home (the number of months depend on the number of the
investors). In this method of investment the common policy is the more the merrier.
Although, each investor owns just as much as you do.
Banks and lenders consider fractional ownership homes to be similar to a second home, so it is
usually easier to finance a fractional over a timeshare. Also, the rates are often lower on a
fractional ownership. With this said not just anyone can get fractional ownership, this proves
its distinction from the dreaded timeshares.
An actual investment
Fractional ownership is an actual investment. Timeshares, on the other hand, are like
Cadillac’s. These investments tend to plummet in price as soon as you sign the paper. If you
go on EBay right now you will see hundreds of people trying to sell their timeshares. The price
is a tiny fraction of what they paid for it just a few months prior. With fractional ownership the
property value increases and so does your investment. This is especially seen if you invest in
preconstruction fractional ownerships. Out of hese investments you get the large payoff.
Normal fractional ownerships have little to no risk associated with them. This is just an idea to make more money off this opportunity.
On average a family uses its vacation or second home less than 21 days a year. This is why
fractional ownership has started, it was created because their truly is a market for it.
Fractional ownership opens a door for the thousands of investors that want a luxury vacation
homes but do not want to pay hundreds of thousands for it. These properties are in greater
demand than typical real estate investments. With this said, if you are interested in any
fractional ownership opportunities you should start looking now!!!