• March
    25
    2019
  • 3 min read

Fractional Ownership or Timeshare?

fractional ownership

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Is fractional ownership just another name for timeshare?

The world of vacation ownership can be confusing and fractional ownership is no exception. Let’s take a look at what it is, what it isn’t, and why you might want to steer clear.

What is Fractional Ownership?

Fractional ownership is any property arrangement in which two or more parties own the same property together. The property can be anything from a boat to a vacation house. However, today we’re talking about vacation properties. So in that case, two or more owners would own a home or condo together and each would be able to use the property at different times.

You may be thinking, “That sounds a lot like a timeshare.” And you’d be right. In fact, deeded timeshares are a type of fractional ownership. So why call them by different names? One reason is that timeshares have a bad reputation in some circles. So sometimes developers will use the term fractional ownership to describe a timeshare. Be very wary of any sales rep or contractor trying to hide the truth about what they’re selling. However, many fractional ownership arrangements are not deeded timeshares.

Key Differences

In all things related to vacation ownership, each case is unique. So much depends on the individual situation. However, here are some key differences between deeded timeshare ownership and fractional ownership.

  • Fractional ownerships typically have fewer owners.
  • Because there are fewer owners, each owner gets more time on the property.
  • The value of fractional ownership fluctuates with the real estate market.
  • There may not be a developer, resort, or other company involved.

Key Similarities

While fractional ownership may have some advantages over timeshares, unfortunately, many of the disadvantages of timeshares still apply. Here some of the key things to watch out for.

Difficult to Sell

Timeshares are notoriously difficult to sell. And like selling your timeshare, selling your fractional ownership can be tricky. Many people are wary about entering into what is essentially a partnership with people they don’t know. In fact, it’s even difficult to find a real estate agent willing to work with you on a fractional ownership sale.

Governed by Someone Else’s Rules

Because you share the property with others, you don’t get to use it the way you want to. You can’t do your own decorating. You can’t leave your personal items between visits. And you can’t use the property whenever you want. Plus, as with any group dynamic, you may face disagreements between owners. Many properties solve this problem with a Homeowners Association. The HOA makes and enforces rules and is responsible for ensuring general upkeep. In any case, you’ll be subject to the shared rules and agreements.

Annual Fees

You’re still subject to annual fees, just like a timeshare owner would be. The costs may not be called maintenance fees, but you will still have to pay for routine, ongoing maintenance, repairs and upgrades, and property taxes. And if you do have a Homeowners Association, you’ll also pay HOA dues.

Is It Worth It?

That’s a question you’ll have to answer for yourself. However, in our line of work, we see a lot more people unhappy with their fractional ownership than not. Why not skip the long-term commitment and headaches and vacation where you want, when you want, how you want?

If you do need help getting out of your timeshare, contact us today. We offer a free, no-risk consultation that you don’t have to share with anyone.

(Image by Quinn Kampschroer from Pixabay)

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