When going for an out-of -town or country vacation has become a yearly thing and a family tradition, dreaming of having your own holiday home may not be far behind. But what if you still can't afford one? Don't fret for there is an option - fractional ownership.
In fractional ownership, a home is shared between several buyers. It has long been established in the United States, but has just started to become known in other countries. While there may be some differences the operating models, generally the owners get to have outright share of the property.
Many find fractional ownership as a better alternative than investing wholly in a vacation house. Kim Goddard, who sells fractional villas at Royal Westmoreland in Barbados in the eastern Caribbean of the British Commonwealth, says: ""Our clients want to control their lives, but often aren't ready to commit to one location for a second home. Shared access to luxuries such as cars, private planes and staff is growing exponentially and our fractional ownership fits in with these trends." A major consideration would be avoiding the hassles of a year-round charges for the service and maintenance of a particular property when you will just be staying in it for just a few weeks in a year. Maintenance charges include, but are not limited to, pool care, gardening, insurance and internet.
However, fractional ownership should not be confused with timeshares as the former is typically applicable to luxury or high - end properties and the sharing is among fewer people. The privileges may extend to more than one luxury property. The annual usage, on the average, is from three to four weeks and not just one to two weeks. Moreover, concierge - level services is given, similar to when a guest stays in a luxury hotel.
Just like the owners of deeded properties, fractional owners can put their stake in a trust, leave it in a will or sell it. Property taxes, as part of the annual dues, are paid by the fractional owner and these may range from $8,100 to $21,000, depending on the property and covering utilities and the concierge services. There are borrowers who are able to write off the mortgage interest on such taxes.
However, there is a downside to it. Since many share the property's ownership, making changes to it may be limited.
