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What is a " Fractional " real estate investment ?
The term " Fractional Ownership ", as it applies to real estate, means owning a " Fraction " of the available use of real property. For the record, fractional ownership has been around in the luxury boating and jet aircraft industries for a long time. In either application it means a pre-determined number of fractions are made available for purchase to potential buyers. As an example, a developer of a prime real estate project may feel that a project may sell better if buyers are allowed to purchase shorter intervals of usage as opposed to the entire purchase price. Many fractional properties sell time in two week blocks. In this way buyers may be able to afford a gauranteed vacation spot at a price far less than outright or total ownership. In this fashion a developer can sell 1/25 of a project at very competitive prices. You may notice that there is usually a one or two week period which is not sold. This period may be used for promotional events or routine maintenance. Buyers will see a pricing differential based on desirability of location, location within the project, type of unit and time of year during which your block occurs. A recent trend in the real estate sector " bundles " the purchase of the fraction with membership in a more traditional " Time share " which allows the fractional owner to swap his block of owner usage with others around the world ! A very attractive benefit.
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Contributor's Note
The author is a licensed Florida Realtor and has sold condo/hotels and worked on-site at a Fort Myers Beach fractional .
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