The Benefits of Shared Ownership
Fractional, or shared, real estate ownership is a well established concept that is commonly confused with time shares. With time shares, the investor never actually ‘owns’ a part of the property, they simply ‘rent’ time from others; which is no different than staying in a resort or hotel. With fractional real estate you actually own the asset, take part in its appreciation, and should the time come; you are able to sell your portion of the property.
With fractional ownership individuals own a part of the property in their desired location. It also gives them a specific usage time that is convenient for them, and fits into their lifestyle. Being a fractional owner means you share the costs related to owning vacation property with the other owners. For instance, if the cost of maintaining a property including grounds maintenance, cleaning and repairs is $30,000 US per year and you own 1/6 of the property, your yearly cost would be $5,000 US. If you used the property 8 weeks per year, your cost per week would be $625 US. You couldn’t find a room at any resort anywhere for that price.
Unlike a time share where you do not own the property or asset, with fractional ownership you actually own the property and have exclusive use of your home during the months selected. The amount of use per year is determined by the number of fractional months purchased. The benefit of fractional ownership over whole ownership is you will not have the worries of maintenance or management, making your fractional investment truly a vacation for your family and friends. Your investment will have the ability of future appreciation and your unused weeks may be rented. So for example, if you own two months of a beach home, you have the ability to make an extra $2,000 or more per week for the weeks you won’t be using the property.
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