Thinking about buying a vacation home is a big deal with many different choices available. In recent years a new concept has emerged called fractional home ownership where owners share both the ownership and the responsibilities of a vacation home.
Fractional home ownership is similar too but also vastly different from timeshares. With a timeshare, the buyer purchases a 1 or 2 week block of usage in a resort property. You can also trade your time at your resort for time at another resort within the network.
In fractional ownership you are entering into a partnership with other owners where you share the cost of owning and maintaining the home the partners. In essence, you are buying a “divided piece” of real property that can range from 2 pieces to 13 pieces.
For example, if a lake home is divided in the 13 deeded pieces, each buyer would get to use the lake home 1 week a season for a total of 4 weeks a year. Other popular options are properties divided into 4 pieces where each owner gets to use the home 1 week a month and only share expenses with four other owners.
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.
The management generally handled by a property management office. A homeowners association is formed and the association fees are divided among the owners. These fees then help pay for things like utilities, insurance, taxes and maintenance.
Fractional home owners cite many reasons why they purchased using this method. Many could afford to buy the home, but felt the fractional ownership met their needs. In addition they liked the concept of not having to care for the home, pay someone to clean it, check on it weekly, etc. They still have a deed to a the property that will appreciate in value.
Closing Comments
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.