One of the many fast growing forms of vacation property ownership is Fractional Ownership. Also know as Private Residence Clubs, fractional ownership is often misunderstood as another time-share opportunity.

These are not time shares, (A contract specifying a right to use a property on certain weeks).

Fractional ownership is an actual, deeded interest (usually 1/4 to 1/13): You can sell it, leave it in your will, put it in a trust, almost anything you could do with a normal deeded property you can do with a fractional ownership property.

The catch is that you only get to use it a fraction of the time, hence the name: Fractional Ownership.

Of course, there's no confusing fractional ownership with full ownership. You can't redecorate the living room or hang personal photos on the wall.

What do you get when you purchase a Fractional Ownership?

Depending on the location and type of structure, owners may get a beautiful, high-quality property, located in a fantastic location. Property types include: Detached single family homes, hotel suites, cabins, townhouses, villas or an upscale Penthouse Condominium located in a tropical paradise.

With great services and amenities offering a carefree vacation lifestyle fractional ownership may typically be purchased for 10 or 15 percent of what someone would normally have to pay to buy the house on their own.

The burden and cost of repairs and upkeep of buying and maintaining these properties is shared by all purchasers of the property. Homes, instead of sitting idle most of the time, are nearly always being used.

The amount of time you are actually allowed to use Fractional ownership properties varies from property to property.

Prices also vary widely and may range from $40,000 to more than $1 million, depending on the location, number of weeks, number of bedrooms and level of luxury.

Amenities

Typically offering extensive amenities, ranging from a lavish clubhouse and spa to five-star hotel services that would not be available with wholly-owned vacation homes or timeshares, fractional ownership properties maybe an attractive trade-off for increasing numbers of vacationers. Additional amenities offered may include: airport pick-ups, spas, grocery restocking, restaurant reservations and more.

Many fractional ownership properties are operated and managed by well-respected hospitality companies known internationally for their first-class accommodations such as Ritz Carlton, Four Seasons, Starwood, Intrawest and Millennium. These are brand names with sophisticated, experienced operations and the ability to deliver five-star service and amenities. These companies take care of the routine maintenance issues such as: mowing the lawn, raking the leaves, shoveling the snow (where applicable) etc.

The ability to exchange weeks with other resorts and destinations is another amenity and is nothing new, an old concept from timeshares. However, for some fractional ownership properties, this concept has been improved on. With allowable usage of four or more weeks some offer the ability to
spend part of the time at a different property in another part of the country - or the world.

Some fractional ownerships participate in an exchange program that gives owners the ability to reserve time with other properties that have a similar level of luxury and service.

Locations

Fractional Ownerships are being found in many popular vacation spots today. From high-traffic ski resorts to warm water tropical destinations. Many popular fractional ownerships can be found in upscale golf-oriented communities as well.

Appreciation Potential

Because of the emphasis on placement in highly-desirable locations, it is likely there may be substantial appreciation over time. However, appreciation ratios vary significantly from area to area. It is advised to check with a local real estate professional regarding the potential appreciation of any investment property.

Pricing

Based on the size, amenities and location of individual properties, the price for a fractional ownership varies greatly. A typical price range may be $100,000-$500,000 for an upscale luxury homes that would cost two to five times as much if purchased outright as wholly-owned vacation home. Typically, you pay a one-time purchase price plus a yearly maintenance fee that covers all of the expenses associated with property ownership and its use and services.

At the very least, Fractional ownership offers many vacationers a choice. The attractiveness of having actual ownership in a luxury property is a draw to many. While some prices are steep many are an affordable alternative to full vacation home ownership.

Buyers are advised to shop carefully; owners depend much more on the operators and managers to protect their investment than they would if they were buying their own house. It is advised to utilize the services of a local real estate professional regarding the potential purchase of any real estate property.

It is quite possible that fractional ownership could eventually fall by the wayside. But for the immediate fore seeable future, they're here to stay.