Why Fractional Property?

Fractional Life exists to help consumers make sense of the often-bewildering range of fractional prospects available to them. Opportunities such as car clubs and the like may be easy enough to rationalise, you check out the prices, have a look round at the vehicles on offer, confirm the company is a quality one and then you pay your money but other decisions can be all the more difficult.

One such area is fractional property, a tough leap to make not least of all because of the often large sums of money involved and as one of the fastest growing markets no sooner have you done your research then a new opportunity springs up and your back to square one. But the main issue that blights the market is the mention of (whisper it) 'timeshares'.

Although when put on the spot to explain how fractional property ownership works in a few sentences the dreaded 'timeshare' word may sneak in and set alarm bells ringing in potential investors and although it would be imprudent to dismiss that they do actually share a common focus on desirable leisure destinations it is important that prospective purchasers see the crucial difference between the two…

Fractional property title allows a limited number of stakeholders access to a private, high-class residence or apartment for a set period of time each year at a cost far lower than outright purchase.

A timeshare is an asset sharing scheme whereby one parts with their hard-earned in return for time in a particular holiday resort, you are only buying the use of the property and in comparison to fractional luxury properties they are often of a lower standard. The main reason for timeshare horror stories is that when it comes to reselling the share and recouping the original investment (assuming that one has not been pushed into buying a dingy broom cupboard in the back of beyond where no one wants to go!) is that the small-print dictates a remarketing cost that often wipes out a large percentage of any possible return.

On the fractional side it is generally only the usual brokerage fees apply as per any regular real estate deal. Furthermore, fractional ownership is a real property ownership right rather than just a usage right as with timeshares. In short this means that if the property price increases then you reap the benefit and at the present time secondary home values are approaching those of primary properties.

Obviously, putting our rose tinted specs to one side for a moment, it is possible that the market could drop off in the future- this does not seem likely in the short term with prime locations currently in strong demand and fractional share resale increasingly sought after- but it is best to consider the worst case scenario which actually highlights another benefit of fractional purchasing. If you only own, say, a 10th share in a residence then you are insulated against any price fluctuations by the virtue of the fact the financial benefits and possible pitfalls by your fellow owners.

As we advise with any sizeable financial transaction you should seek independent advice and only deal with reputable companies such as those listed on our site as terms and conditions as to fees and access do vary from company to company. Also don't forget to bear in mind seasonal demand- don't invest in a property that is only desirable for a short period each year!