Fractional ownership lowers entry cost barriers

11.22.2010

While purchasing a villa as a vacation home is considered a strong investment by some, the up-front cost can be a potential barrier for some. However, as the Daily Mail reports, fractional ownership can be a valuable option for some.

Real estate analysts say that pursuing fractional ownership is generally less about the property itself and is motivated by people "buying into a lifestyle." It differs from a timeshare because it involves buying a portion of the physical property.

"People still want to have great family holidays somewhere they can think of as a home from home," Nick Turner, vice president of The Registry Collection Europe, told the paper. "People will be thinking hard about investing several hundred thousand pounds in a property they may only use for six weeks of the year. Fractional ownership provides consumers with an alternative - at a low entry-level cost."

In addition, the paper says that many fractional owners get to take advantage of health club and spa opportunities at their property - benefits that may have cost them significant annual fees elsewhere.

Many areas have reported a strong demand for fractional shares, such as from those looking to buy a villa in South Africa. Property24 recently reported that fractional properties in that country have grown more than 22 percent over the past year.