A Piece Of The Pie: Is Fractional Ownership For You?
You may have heard of fractional ownership by its previous name–timeshares. This term gained a bad reputation so the industry re-branded itself and cleaned things up a bit. While this way of owning a vacation property is still a bit risky, it's still a great way to carve out your own personal piece of paradise as long as you proceed carefully. To learn more about fractional ownership, read on.
A Fraction of the Property for a Fraction of Time
This type of real estate transaction allows owners to share ownership by dividing up the cost into the days (or weeks) of the year. As an owner, you get exclusive use of the property for a certain time period. The rest of the time, other owners use the property. The property only fractionally belongs to you. Fractional ownership deals are common in highly-desirable resort areas where owning or even renting property can be expensive. Here is what else you should know about fractional ownership before you jump on a deal:
- Use a real estate agent to help every step of the way. Real estate agents that work in resort areas know all about fractional ownership deals. They can help you locate a property that meets your needs, is a good value for your dollar, and has good management.
- Speaking of management, the way your property is managed is of prime importance. You won't be there to see the use (and abuse) your property receives when several parties make use of the same condo or apartment space. To complicate matters, you may buy into a property that allows the owners to rent out their time to outside interests. When non-owners use a property, care may not be taken. That is where good management comes in to ensure that properties are monitored and kept to a certain standard.
- At the same time you are consulting with a real estate agent in the area, do a bit of detective work of your own. By checking out the property on sites like Trip Advisor, you can find out what others are saying about the property. Pay attention to complaints about elevators not working, dirty pools, crimes in the parking area, and more.
- Ask the real estate agent about the reputation of the property. Some areas may be in decline and that is why the unit is so affordable. You will want to avoid declining properties not only for your own reasons but when keeping in mind the resale value of it if you ever want to sell your fraction.
Speak to a local realtor to learn more.