I am an enthusiastic support of fractional ownership, but everything has its downsides.
It’s not suitable for everyone for the following reasons:
1. The obvious one! You can’t use your fractional property, real estate, yacht or whatever it is whenever you want! If you value spontaneity or you have the sort of life where it is hard to plan a vacation in advance then fractional ownership may not be for you. I have heard a counter argument to this (relating to fractional ownership of yachts) that says that because you have a fractional week booked you make an effort to use it, rather than thinking that you can use it anytime and not getting round to it! I’m not sure about this.
2. Not so obvious is the fact that with most fractional ownership schemes (for real estate) it isn’t possible/easy to get a mortgage to buy it. This means that you have to get the funds from elsewhere (typically a re-mortgage on your primary home). Also you cannot benefit from the “geared” investment gains that would result from purchasing real estate outright with a mortgage.
To be continued….
Take a look at the following resources if you are considering a fractional ownership scheme
