About Fractional Ownership

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Fractional Ownership is one of the fastest growing sectors of the property market and in 2005 accounted for $1.5 billion of sales in the US alone. It provides both a legal and use structure that makes sharing a holiday property easy and brings ownership within reach of many people.

There are a number of different fractional programmes but the bottom line is that there is a carefully documented plan in place to ensure that each of the owners has absolute certainty about when they can use the home.From the outset all parties sign up to an agreement that clearly states the obligations and responsibilities of both the Owners and the Management Company.

 The structure may cater for several categories of owner within a single property. For example, families with children may wish their fraction to include weeks during school holidays whereas retired couples might be keen to have ownership at quieter times of the year. Some structures may mean that you own a number of shares in a company specifically set up to own the property. You will buy an asset not a lease.

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YOUR RESPONSIBILITY

When you become a fractional owner, you will be responsible for your share of the running costs (insurance, utilities, etc) maintenance and replacement of furnishings.

It is really the same as owning your own house only it is yours to use for a specified period of time

Fractional ownership allows you more control of vacation property.

Fractional ownership is very common in Europe. It is now being embraced by Americans who would rather own a portion of a villa in France, or Tuscany, or Rio de Janeiro or all three, than merely vacation there once a year. It is also coming to resort areas of the U.S.

With fractional ownership, you are a co-owner of the property. In foreign fractional ownerships, you are usually a shareholder in a nonprofit business entity that includes the ownership of the property. Every investor is a co-owner in the business entity. Their percentage of shares is determined by the percentage of ownership that they are willing to finance for the property.

Assuming a property costs $1 million and there are four equal investors, each would be responsible for 25 percent of the mortgage payments, taxes, maintenance and other fees. If there is appreciation in the property, all would equally share in any profit made at the time the property is sold. Conversely, while they own the property any tax increases or fee increases will be the equal burden of all investors.

When asked about U.S. citizens getting funding for foreign properties, he explained, “We help U.S. investors secure funding for their foreign investments. Banks in Europe are very conservative. Most purchases require a 20 percent down payment. Borrowers’ financial information is thoroughly scrutinized.” He adds, “Property valuations are done by persons who have four-year college degrees in the field.”

A good contract among fractional owners is essential for the arrangement to go smoothly. We have attorneys that help fractional owners design agreements that protect all of their interests.”

People choose fractional ownership for several reasons: “They have an investment they can use for business or personal use. They can buy a more luxurious property in more high-end locales. They have control over ownership and décor. And there are no rental headaches associated with others using the property; they are all co-owners.”

For more information on fractional ownership

Please contact me at 305-320-6744

 Hutchinson Island . Including Hutchinson Island ocean view homes, Hutchinson Island beachfront condominium rentals and Hutchinson Island ocean front condo in Hutchinson Island, Florida.