Fractional Ownership in Real Estate

By: Groshan Fabiola
As the phrase suggests, 'fractional ownership' refers to partial ownership of a property. The piece of property that represents the subject of fractional ownership is typically owned by at least two individuals. Fractional ownership in real estate is quite popular for vacation resorts and properties. In fact, fractional real estate ownership is quickly becoming a better alternative to full ownership as far as vacation homes are concerned.

Vacation properties are often used infrequently, which makes it fairly hard for full owners to justify or recover their investment. The advantages of fractional ownership in real estate become more obvious if you consider a large and expensive property, or a luxury vacation home, which you cannot afford to purchase on your own, nor cover all the expenses that are generated by owning a second home. Instead of being the sole owner of the real estate property, you purchase and own a fraction of it, and share all taxes and maintenance costs with the other owners. Do not mistake fractional real estate ownership for timeshares. The concepts are different in many aspects. In fact the only thing they have in common is that both options are mostly preferred for vacation properties. Timeshares refer to renting a specific property for a determined amount of time, without owning any part of the property itself. As has been said before, fractional real estate ownership allows you to become the owner of a fraction of the property, with all the advantages and benefits that derive from this.

Fractional ownership in real estate involves sharing. This means that your use of the property will be restricted when the other owners are using it. The specific amount of time that you can spend at your residence depends on the number of owners, as time must be equally split among all owners. With split cost of ownership and savings on insurance and maintenance costs, along with the opportunity to invest in a wide range of properties, fractional ownership emerges as a very good deal.

The fractional real estate ownership option represents a very good solution for those interested in making some profit. If you purchase a piece of real estate property together with several other owners and choose not to use part or all of your allotted weeks at the residence, you can rent them out to other parties and make profit. You can choose to rent the property to the other owners or to other individuals who are not part of your fractional ownership plan. The contract that all owners must sign when opting for fractional ownership in real estate typically includes the rules regarding the rental of the property to other parties.

Owning a vacation property is just a beautiful dream for many people. However, with the fractional real estate option, this dream can come true. Fractional ownership in real estate represents a very easy way to own a vacation or resort-like property. The most important advantages that come with fractional ownership including having a place to spend your vacations, little responsibility for the property and the related expenses, as well as the opportunity to sell your share of the property as you wish.
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