How Fractional Real Estate is divided into use weeks

One of the things to keep in mind whether you are buying a fractional or selling your luxury home into fractional real estate units is how the years is broken up to the individual fractional owners.  Typically each year is rotated so that each owner gets their fractional use of his/her real estate during the key holiday periods. 

The amount of use weeks per year is determimed by the number of fractional real estate owners and the number of weeks allowed for maintenance.  For example, one example of a ski chalet fractional that is divided amongst four fractional owners, is the use of one week per month that rotates in the following year.  Another example is 2 weeks each season if there are say, 6 owners of the luxury home, villa or condo. 

Extra value that helps the future appreciation of your fractional real estate ownership is if there is the possibility to rent your weeks out.  So for example, if you own 1/6th of a beach home, you have the ability to make an extra $2,000 or more per week for the weeks you won’t be using.  

 It also would be wise if you are a developer or seller of the luxury home to offer ‘guaranteed” rental income for two weeks out of the year, in prime season to the potential buyer.  This is a nice added feature to your fractional marketing as it is an USP over other fractionals a buyer may be looking at.  Additionaly, in prime season, there should be no problem renting a $1 Million plus luxury home/condo so the guarantee is not as risky as you might think.  If you can’t rent it out…then the home or condo is most likely NOT in a location that is suitable for fractional real estate ownership.

How Fractional Real Estate Works

If you have been associated to real estate business, then buying and selling of property will not be new for you. However, there are certain things that can be a little different while purchasing fractionals.  Fractional real estate purchase is one such thing that will be similar to any other real estate purchase, but, there you will only be entitled to get the ownership for a limited part of the property.

It is sort of divided up a big pie into smaller slices, still tastes darn good and you get the same experience of the luscious tasting pie and your appetite only required a small piece rather than the whole pie!

The basic thing about these fractional real estate purchases is concealed in the concept of weekly usage. There may be a different number of weeks available for owners corresponding to each season. This concept of fractional real estate purchase is similar to timeshare; however, there may be an exception in number of owners in fractional real estate purchase.

Also, there will be better services with fractional real estate ownership along with an increased time limit to come and stay at your property. As mentioned that you can avail different options to stay in which will be in weeks. Generally, you can stay at these fractional properties between 4 to 12 weeks in a year. However, these weeks will not be continuous and consecutive which is quite understandable as well, i.e. different weeks in different seasons will bring a variety of joy for you. Fixed weeks and rotating weeks are another thing to see in this regard.

Additionally, owning a fractional real estate investment is a much STRONGER real estate investment than a timeshare.  For example, I know of 4 girlfriends who purchased 1/4 each of a $300,000 home in Las Vegas, Nevada.  They and their husbands love it and they divy up the 1/4rth of the year on a rotating basis so when they fly from the cold Canadian weather, they love the Las Vegas experience of being close to the strip, having a pool, and having a great real estate investment as the home is worth over $500,000 today.  You can’t experience that with ANY timeshare ANYWHERE in the world – in fact, the experts say that timeshare investments are rarely worth what you paid for a timeshare as the majority of the cost you pay is in ‘timeshare marketing’!

So, it can easily be said that the working of fractional properties is quite similar to timeshares, but, you will be able to enjoy that little bit extra with the purchase of fractional real estate ownership.