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Go Global – Go Fractional
By Patricia Tan
There is a growing trend in the international real estate market towards fractional ownership. The global recession undoubtedly influenced this growth, by causing many people to stop and consider their financial position and formulate new strategies for fiscal management and wealth preservation. In recent years there had been a tendency for those who could afford it, to buy not just a second home, but a third or fourth home around the world, to meet their lifestyle needs. It would not be unusual for someone to have a loft in New York to enjoy city life, a ski lodge, a beach retreat and a golf haven for instance, using each of these residences for only a short period in each year.
In today’s world of financial prudence, owning several homes may not be the best strategy, and that is where fractional ownership can help.
What is fractional ownership? As the phrase implies, it means owning a fraction or share of something. For the purposes of this article we are talking about real estate, but this form of ownership is also being applied to exotic cars, works of art, airplanes and other “big ticket” items. Fractional ownership is a means of owning and enjoying something collectively, to minimize and spread costs and possible risks of ownership.
The downturn in global real estate markets also accelerated the rate at which fractional ownership properties became available, as developers saw the fractional approach as a way to move homes that would otherwise have remained unsold.
Fractional ownership should not be confused with timeshare. There are some significant advantages of fractional ownership when the two are compared.
Timeshare does not offer actual ownership of the property only the right to a period of usage. Fractional ownership is deeded, and can be sold, gifted or passed on to heirs.
Fractional ownership can be established to meet the needs of a group of people buying a particular property, with each party buying similar or differing fractions of the property, and it is usually easier to control and manage as there are fewer people involved.
Reselling a timeshare can be challenging and the resale price is often much lower than the original purchase price, whereas fractional ownership property values will behave in much the same way as general real estate values.
We do have fractional ownership properties for sale here on the Gulf Coast of Florida. These range from a single family waterfront home on Longboat Key, to the Hyatt Siesta Key Beach which also provides membership to the Hyatt Vacation Club, allowing owners to choose to vacation in another resort if they desire. Outside our local area, there are branded fractional properties in most major U.S. cities and resort areas.
Fractional ownership has also grown tremendously in Central America and the Caribbean, where we represent a range of properties from fractional condos and single family homes in Panama to world class beach resorts in Costa Rica and Barbados.
Fractional ownership is an investment in real estate. It allows the consumer to experience various locations and life styles, while minimizing their capital investment and operating expenses.
Patricia Tan was born in England, and moved to Sarasota in 1997. Her career afforded her the opportunity to live and work in many countries around the world, including Australia, Hong Kong, Singapore, Malaysia, Indonesia, Germany, France, Belgium, Netherlands and the United Kingdom. She spent five years as a Director of an American real estate franchise in England in 1990s. Patricia has served as Chairperson of Sarasota Association of REALTORS®’ International Council, and serves on Florida Association of REALTORS®’ International Operations Committee. She currently works as International Sales Director for Prudential Palms Realty. Patricia may be reached at 941-487-5107 or patriciatan@prudentialpalmsrealty.com [2].
Copyright © 2010 REAL Magazine
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