subject: The Booming Trend Of Fractional Ownership [print this page] Fractional ownership is a growing trendFractional ownership is a growing trend. People don't want the expense and hassle of owning something you may only use for a few weeks out of the year, and now that's possible.
Fractional ownership is also known as Private Residence Clubs. This actually gives you shares in a property or other type of asset that counts as a legitimate, deeded interest.
The share of ownership typically will fall anywhere from around a quarter to an eighth, or the property will usually be split between 4 to 13 owners. As a fractional owner you get to use the property or asset a certain amount of the time.
The price of this usually falls between 10 and 15 percent of the full price of the asset. For a home the price may be anywhere between $40,000 and $1 million.
The price will fluctuate depending on the location of the home, the type of home, the size of the home, the number of weeks you are purchasing, and the class of home. The maintenance and repair charges following a purchase of FO are split between the owners.
Of course, you must be considerate of the other owners by not hanging personal photos on the walls or remodeling without permission. FO is a great way to take a family vacation to an exotic location for a discounted price.
"FO" became popular for business jets first. Buying more shares bought you more flying time.
Now you can be a part of owning yachts, cars, vineyard, clubhouses, and real property. Whatever the asset, it is divided into fees which are allocated to the many different owners.
Think somewhere between renting and buying and you have fractional ownership. You only get a certain amount of time, but with ownership rights.
Real property is very popular, because many use it for vacations. It would make for the perfect place where you feel comfortable on your getaway.
For people who like to go up to ski during Christmas, you don't want to pay for the property during the summer. This method makes sense to pay for what you use.
Most owners get the privilege to priority access on holidays. Usually the company will take care of services, repairs, and upkeep of the property too, which is why this is a popular vacation tool -- less stress.
With FO you still get to have the value and quality from regular property ownership, but at a much cheaper price. The buyers get a fraction of the freehold, which lets them use it for a certain amount of weeks.
The downside is that while you do get a certain number of weeks guaranteed, you do not get to go just whenever you want for how long you want. You have an agreed period every year.
Timeshares are sometimes marketed as FO. However, that is only a right to a specific location with a specified period of time.
With timeshares, you run the risk of getting your share later than others. You could end up with your time slot being in October when no one wants to take vacation.
With Fractional Ownership you are provided with a title interest or deed. Fractional ownership is a much more affordable way to have a second home.
These homes are usually much more luxurious and offer fancy extras that would otherwise be unaffordable for many people to purchase fully. For example, many fractional ownership homes will feature a club house, spa, grocery restocking, airport pick-ups, and fancy hotel service.
There are many companies who will do the daily maintenance for you such as Ritz Carlton, Four Seasons, Starwood, Intrawest, and Millennium. If you get tired of your current home, it is common practice for people to swap weeks with another owner or company.
Some fractional ownership companies offer one fractional ownership price, but allow purchasers to enjoy their weeks at any of their locations as long as they book ahead. Overtime a fractional ownership can be looked at as an investment, because in specific times and places the property you purchased becomes more valuable throughout time.
Fractional ownership is a very worthwhile, fun, and prosperous investment.
