Fractional ownership simply provides an affordable alternative when purchasing recreation property. According to the RE/MAX Property Report baby boomer demand has created has created an upswing in the starting prices. Western Canada is home to the most expensive average price on three bedroom waterfront properties. For instance Whistler, British Columbia (BC) is priced at $1.1 million, Salt Spring Island, BC - $1 million; Kelowna, BC including Lake Okanagan $1 million; Vernon, BC - $800,000; Sylvan Lake, Alberta -$800,000. High prices in whole ownership has created a strong market for fractional ownership. Fractional ownership usually occurs in market places with escalating housing costs and appeals to buyers who can afford a second home in an exclusive location but do not want to pay the high prices for a condo that they will only use a few weeks each year.
Why fractional ownership is not Timeshare:
Investing in a share of real estate as a result you can increase equity in your investment as the market increases. Most recreation properties are experiencing an increase of 14-16% each year whereas timeshares are considered a depreciating asset over time as most are leased making them less valuable as you get closer to the end of the lease.
Fractional ownership you generally get more than one week per year. For example quarter share interests allow use of one week per month - 13 weeks of use.
Will or sell your interest without having to get permission from the other owners. The condominium is independent of the other owners and can be sold at any time.
Advantages of Fractional Ownership:
Affordability - As prices continue to rise in recreation communities fractional ownership provides an ̉inÓ to a growing market.
Ease of Use - Fractional ownership is simple because the property is managed by a professional company. Often purchasing in groups causes many nightmares as property depreciation like a broken television that need to be dealt with the other owners. Another common problem is when one owner would like to sell and other owners do not buy outs must be negotiated and values must be placed on the asset. Rental management problems and property management issues are also common with shared ownership.
Appreciating value - take advantage of the strong resale increase of values.
Flexibility of Use - Use your suite as often as you like. Most fractional ownership properties have an optional rental pool where you can make revenue when you are not using your suite.
Flexibility of selling - sell your quarter share interest anytime you like without having to get permission from the other owners.
Reduced overhead costs- condo fees and taxes are charged to each owner therefore reducing the cost of individual ownership.
