How is fractional ownership different from a timeshare?
Luxury fractionals differ greatly from old-style timeshares. In traditional timeshare developments, there are only two types of purchases: Right-to-Use or Fee-Simple. Most timeshare resorts are Right-to-Use, meaning the owner has the right to use it for a period of time and then it reverts back to the developer. It is similar to a vacation club – you never actually own the real estate. Fee-Simple, however, represents ownership, i.e., the owner(s) receive a general warranty deed with their purchase. In addition, there are three major opportunities in fractional ownership that are not possible with traditional timeshare: Value: A fractional has the capacity to appreciate or depreciate based on market swings. History to date has shown increases of 6-7%. Properties are generally managed by a property management company or hotel group, which eliminates many headaches of second-home ownership. Financing: Fractionals can be mortgaged over a period of 30 years if necessary, at an interest rate
