Guest Post

Sarah Scafford of International Listings offered to explain the differences between Timeshares and Fractional Ownership of vacation properties. Unfortunately real estate literature on the distinctions between the two seem biased depending upon whether one is selling timeshares or fractional ownerships. A simple bullet point list can be more clarifying than reading through pages of marketing or the Wikipedia definition.

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Vacation homes are becoming increasingly popular, and not just with the rich and the famous. Thanks to timeshares and fractional ownership, it’s possible to own, and yet not own a home that you can use every year as a vacation retreat. Though both concepts are related to vacation ownership, there are basic differences between the two:

• Timeshares typically last a matter of weeks while fractional ownership ranges for a few months. Some places allow time shares for even a single night; fractional ownership is a concept where the ownership of a resort is divided equally between the number of people who share the place.

• Timeshares are owned by many other people besides you while fractional ownerships are shared by between 5 to 7 people who reside in the place at certain times of the year.

• Timeshares do not transfer ownership while fractional ownerships provide ownership deeds to buyers.

• Fractional ownerships are more costly than timeshares, with the initial cost, maintenance expenses and taxes adding up to much more than a similar timeshare option.

• Fractional ownership places are usually more upscale and come with both conveniences and luxuries like spas, Jacuzzis and personalized services.

• Fractional ownerships can be endorsed as alternative residences thus allowing for tax savings.

• It’s easier to sell your share of a fractional ownership as they are more in demand.

• In a timeshare, you have ownership of units of time at a particular resort while a fractional ownership grants you ownership over a part of the title to the resort.

• When you resell them, timeshares depreciate and sell for hardly 25 percent of their original value while fractional ownerships appreciate on a level with regular homes.

• Timeshares mandate that your stay is continuous whereas fractional ownerships allow fragmented visits. You can even trade time periods with your co-owners.

• Fractional ownerships are allowed for luxury objects like yachts and jets and not just resorts.

• You can rent your fractional ownership to others when you’re not using it.

• You can allow family and friends to stay there when it’s your time to use the resort.

• Your heirs can inherit your fractional ownership.

• You can sell your share of a fractional ownership resort.

Some places which are in great demand and full all year through allow both timeshares and fractional ownerships. Timeshares or fractional ownerships, they’re ok if you’re using them as vacation property and not looking at them as investment options.

This article is contributed by Sarah Scrafford, who regularly writes on the topic of luxury homes for sale in Canada at International Listings. She invites your questions and writing job opportunities at her personal email address: [email protected].