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Are Fractional Shares For You
ractional shares bedrooms, family rooms, pools,
("fractionals") are decks and outdoor recreation
sometimes confused with areas, and a host of other
other vacation property options, features that make them exclusive
such as time shares and condo properties. A fractional property
hotels. While there are would be out of the price range
similarities, there are a number of most individuals, but because
of things that make fractional ownership of the home is divided
shares unique, and thus suited between a small group of people,
for a certain type of vacation this upscale lifestyle becomes
property buyer. affordable.
Fractionals, also referred to as Typically fractionals are split
private residence clubs, are in 4 to 8 shares, which means
similar to condo hotels in that that arranging time at the
they can be put into a rental property is less competitive than
pool when the owners are not other types of shared ownership
using the property. Also, properties. There is no
fractionals are considered a requirement that you have contact
second home purchase with with the other owners, but many
interest and equity benefits that do develop friendships or at
go along with ownership. But least get to know each other at
unlike a condo hotel, fractionals annual ownership meetings. How
are typically luxurious private involved you want to be with the
homes located in the most other owners is up to you.
exclusive areas.
Even those that could afford to
Although they are available in purchase a million dollar
studio and one-bedroom units, vacation home may only be able to
most are larger with several use the property for a total of a
month or two during the year and communities of California and the
might feel that it is not a wise Caribbean but have spread to
investment. Fractionals allow other areas of the country,
owners to decide how often they including Florida. In fact,
want to use the property, with fractionals are the fastest
packages ranging from two weeks growing sector of the timeshare
to three months (not industry, growing over three
consecutively). Prices vary times faster than the industry as
accordingly. a whole
This is an ideal situation for One of the reasons they are so
those who enjoy staying at popular is because since you
quality lodging when on vacation purchase deeded ownership to your
and prefer to put money toward share of the property, banks
their own investment, rather than offer more favorable financing
putting that money into the for fractionals than for other
pockets of a hotel chain or shared ownership options, often
resort management firm. When you treating them as second home
own a fractional, you can rent it purchases. Because there are far
out yourself or offer it to fewer fractionals available than
friends and other family members. timeshares, their value tends to
And if you decide that you want increase, making them a better
to sell your share of ownership, bet for banks to finance.
you are free to do so at any
time. Or you can will it to your Another benefit of fractionals
children or other designee. that makes them popular to buyers
is that many of them come with an
Fractionals first became popular option to upgrade to a larger
in the posh ski resorts of residence if one is available.
Colorado and Utah and beach And some fractional properties
are owned by organizations with the best in guest services and
units in other parts of the amenities. And if you have the
country or world, and they will option of placing your unit in a
allow you to transfer your rental pool on a rotating basis,
scheduled time to one of these the reputation and sales clout of
other properties. So you may own the management company increases
an oceanside unit in Florida, but the likelihood that the unit will
can spend a weekend skiing in be rented.
Aspen, while staying in the same
luxurious comfort, often for no Perhaps the biggest appeal of
additional cost. fractionals is the personal
service you receive from the
And with a fractional, you don't staff. Prior to arriving, they
have to worry about maintenance, will ready the residence for you,
repairs, or other ownership decorating the home with photos,
responsibilities that can get artwork, books, DVDs, bedding and
overwhelming with a second home. other personal items you keep in
All of these services are storage. They will purchase food
included in your annual according to your instructions
maintenance fee, which is similar and add a hide-a-bed or crib if
to membership fees paid by those needed. Everything is ready for
who belong to a homeowners you when you get there.
association or gated community.
If your home is located in a
Many fractional properties are resort community or luxury hotel
managed by lodging and property, you also receive the
hospitality experts like services and amenities that go
Ritz-Carlton and Four Seasons. along with the location. This
This ensures that your property often means access to golf
will be well maintained and offer courses, marinas, spas, and other
desirable extras. All of this that come with fractional shares,
comes at an average price of but they can come at a hefty
$100,000 to $500,000 depending on price. Before you search for
the total sale price of the home, fractional shares, make sure it
the number of weeks in your fits your budget. If not, there
package and the number of other are other vacation property
owners. options that may suit your needs.
There are many benefits and perks
About the Author:
Leon Altman is the founder of the InvestingIN Real Estate Letter - http://www.InvestingIN.com/realestate/LtrSignup3.htm
For more on finding and buying fractional shares, check out http://www.InvestingIN.com/realestate/resorts/fractionals.htm
Source: www.isnare.com
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