How does fractional ownership differ from timeshares?
While the hassle-free ownership, full management and shared usage benefits of fractional ownership may sound similar to timeshares, there is a fundamental difference. Fractional owners actually own a proportional share of the title of the property. Timeshare owners simply own days or weeks of usage time. If the property appreciates in value, the fractional shareholders share in that appreciation. With a timeshare, this investment aspect does not exist. This important difference is also what distinguishes fractional ownership properties from the recent wave of destination clubs. Destination club members purchase a fixed amount of time to use the club’s properties. Like a timeshare, they do not hold any ownership right in the real property, and thus do not enjoy the capital appreciation of those properties.
