WHAT IS FRACTIONAL OWNERSHIP?

Fractional Ownership is the buying of a property by several independent investors. Typically the freehold of a property will be split into quarter shares, 6th, 8th, 10th or 12th shares. So if you were to purchase a quarter share then you would be able to use the property for up to 12 weeks each year and you would pay a quarter of all maintenance costs. Owners of 8th shares would be able to use the property for 6 weeks each year. Fraxctional ownership suits the followong types of buyer:

-  Those who want to purchase an overseas property but can’t afford it

-  Those who are interested in buying overseas but want to experience the resort or location before committing
    to whole ownership

-  Those who would like to invest in a number of different countries or resorts to reduce their financial 
   commitment in a single country

-  Those who could afford whole ownership but do not feel it makes financial sense.

-  Those who could afford a cheaper apartment but really want to own a large villa

The fractional ownership market emerged as an ideal investment in the USA in the early 1990’s because it allowed investors to partially own luxurious properties in wonderful destinations at a low price and with no maintenance responsibilities. For example, a three-bedroom Villa in Tuscany, a popular fractional ownership destination, may cost over €500,000 to purchase outright but an investor who is interested in guaranteeing a first class holiday experience and hopeful that the Villa will appreciate over the long-term, may only have to pay less than €80,000, plus annual fees of approximately €1,000 to cover maintenance and services costs. Today the Fractional market in the USA is worth over $2.8 billion a year and rising.

  
An advantage fractional ownerships have over timeshare is that owners receive a deed for their fraction of the property, allotting them a share in the property’s equity. With fractional ownership, you’re able to share in any profits the property makes due to appreciation, just as a second homeowner would. Recent research has shown that 75 percent of a timeshare investor’s money goes toward the timeshare company’s administration, marketing and sales efforts, meaning only a quarter of these funds actually go toward the property. In the case of a fractional ownership, 65 percent of the money goes directly into purchasing the property.