Tuesday, November 27, 2007
Fractional (shared) Ownership Explained
Fractional Ownership Of Vacation Property Explained
As a fractional owner, you actually become a co-owner of a property; you split the purchase price, maintenance and taxes with your co-owners, as well as the property appreciation down the road. If the investment costs were the same, why not own a property with ocean views and Gulf access or a villa with a lake view and golf privileges?
The advantages of fractional ownership are numerous:
Investment diversification. You don’t have to bear the full financial burden of a vacation property you will likely only use for part of the year.
Buying power. You may be able to buy a far more desirable property in a better location.
Equity participation. You share in the likely appreciation.
Control. You have management control over ownership, maintenance and décor.
Travel diversification. You have the flexibility to co-own property in several locations rather than being tied to one.
Concept. The fractional ownership concept has learned from the mistakes of timeshares. Timeshares are front loaded with something like 50% commissions and fees with minimal or no appreciation and difficultly to sell.
Minimal ownership. Unlike timeshares, fractional ownership of a property is limited from 2 to 8 owners.
Ownership agreement. All fractional ownership property must have agreements with governing documents for an association, which details the ownership environment for the investors understanding of management, maintenance, resale, etc.
Rental. Although many fractional ownership agreements do not prohibit renting, fractional properties are not purchased for the purposes of renting and therefore the occupants for the most part are the owners.
At The Jorgensen Group, we have properties and financing available. Contact me for more information.
As a fractional owner, you actually become a co-owner of a property; you split the purchase price, maintenance and taxes with your co-owners, as well as the property appreciation down the road. If the investment costs were the same, why not own a property with ocean views and Gulf access or a villa with a lake view and golf privileges?
The advantages of fractional ownership are numerous:
Investment diversification. You don’t have to bear the full financial burden of a vacation property you will likely only use for part of the year.
Buying power. You may be able to buy a far more desirable property in a better location.
Equity participation. You share in the likely appreciation.
Control. You have management control over ownership, maintenance and décor.
Travel diversification. You have the flexibility to co-own property in several locations rather than being tied to one.
Concept. The fractional ownership concept has learned from the mistakes of timeshares. Timeshares are front loaded with something like 50% commissions and fees with minimal or no appreciation and difficultly to sell.
Minimal ownership. Unlike timeshares, fractional ownership of a property is limited from 2 to 8 owners.
Ownership agreement. All fractional ownership property must have agreements with governing documents for an association, which details the ownership environment for the investors understanding of management, maintenance, resale, etc.
Rental. Although many fractional ownership agreements do not prohibit renting, fractional properties are not purchased for the purposes of renting and therefore the occupants for the most part are the owners.
At The Jorgensen Group, we have properties and financing available. Contact me for more information.
