What is Fractional Ownership?
Fractionals are a quickly growing segment of the timeshare industry, however they differ from traditional timeshares. There are many ways in which Fractional Ownership and timeshare ownership overlap (in that they both afford shared ownership and several options for flexibility and usage benefits), however the fundamental difference with fractional ownership and timeshares is that the purchaser owns part of the title (as opposed to units of "usage time"). Fractional properties and property management corporations are generally among the high four to five-star quality designation.
Fractional shares are also generally much larger than traditional vacation property shares. Fractionals generally vary from one-thirteenth share (1/13) to one half share (1/2). That means that, depending on the number of divisions, fractional owners can visit their vacation home anywhere from 4 to 26 weeks per year. For example, if the title is broken into 13 shares, or 1/4 of the number of weeks in each year, then each owner is entitled to one week per quarter, or 4 weeks per year.
And unlike traditional timeshares, if the property value of a Fractional appreciates (which, notably, is the current trend), so do the owner's individual shares. Notably, due to their high-desirability and exclusivity, many new fractional property units have risen from 12-14% in price. Unlike traditional timeshares, when it comes time to sell fractional timeshare, reselling can prove to be a very lucrative and profitable endeavor.