Many people are turning to a relatively new concept in second home ownership. No it’s not timeshares. It’s called fractional home ownership. The best way to define fractional ownership is that it is a middle ground solution between sole ownership and timeshares where owners own shares in a piece of real estate.
Fractional ownership is different from a timeshare. In a timeshare, a buyer purchases a 2 week block of usage in a resort that can be traded between other timeshare owners at other resorts in the network.
In fractional home ownership, homes are divided into deeded shares that can be brought and sold through real estate agents. The homes are divided into 2 to 13 shares. In other words you have to 1/13 ownership in the home.
If you buy a 1/13 share in a fractional home, you are buying 1 week a season, 4 times a year. The most popular fractional ownership shares are 1/4. Under a ownership, the buyer gets to use the property 1 week a month during the year.
Most fractional ownership homes are situated in resort areas with private gates and private security services. Many of the homes have several amenities such as pools and spas. Some communities provide fractional ownership with condos and townhouses where the owners will share the amenities with other owners that may be vacationing at the same time.
Fractional ownership homes will have a homeowners association formed. The owners then pay HOA fees to a property management firm that is contracted to ensure the property is cared for and things like the utilities, insurance, taxes and maintenance are paid.
Many owners of fractional homes say that they choose this route as a means of owning a vacation property that they did not have to care for. They remained in an ownership position in a property that continues to appreciate.
In Closing
If you are thinking of buying a vacation home, maybe fractional ownership is a way you can get into a property that you otherwise may not have been able to afford.