Fractional Ownership vs. Traditional Timeshares

Have you heard of fractional properties and assumed they are the same as traditional timeshares? The term shared ownership has been used to describe both types of investments, but there are major differences that you should be aware of if you are considering investing in a share ownership property. Fractional ownership is significantly different from traditional timeshares and here we will discuss some of the major differences between the two.

Number of owners and Yearly Use

Traditional timeshares are designed to have up to fifty-two owners per unit, so that each owner gets one or two week of use per year at the property.  Fractional properties however, are designed to only  have about sixteen to four owners per unit. This allows for more use per year if you purchase a fractional timeshare instead of a traditional timeshare. On average, fractional owners spend anywhere from three to twelve weeks of vacation time per year at their property. This is ideal for those who find that one week per year is not nearly enough vacation time to validate an investment with a traditional timeshare.

Quality vs. Quantity

Another notable difference between fractional ownership and traditional timeshare properties is the maintenance and wear and tear on the property. Traditional timeshares have up to fifty-two owners per unit and experience a lot of traffic with a new family coming in every week to enjoy the property. This will result in the property becoming older more quickly due to the high number of occupants and likelihood of more damages to the unit. In comparison, fractional properties have significantly fewer owners and will experience less turnover. This also relates to a more relaxed experience, and the staff will likely get to know owners better since they will spend more time each year at the property.  Also, fractional properties tend to have a better location within the resort versus timeshare locations. Fractional properties often have superior construction, upgraded decor, high end fixtures as well as better amenities and upgraded services compared to traditional timeshares.

Income Differences

There are also differences in the required minimum income level needed to quality for fractional ownership vs. traditional timeshare. The minimum qualifying household income for timeshare starts at about $75,000, and you need to make at least $150,000 to be eligible for fractional properties. This variance in income levels also correlates to a different level of clientele than those who own timeshares. Possibly due to a higher standard of living, fractional owners are generally more demanding and expect higher levels of service from the property staff.

Environment & Emotional Connection

In general, timeshare developments tend to be quite large, often having hundreds of units at each property. On the contrary, fractional properties are limited to fifty units or less which results in a more intimate and exclusive environment. Timeshare owners feel less connected to their property since they only spend one week per year at the property, whereas fractional property owners often consider their property as a second home. One similarity between traditional timeshares and fractional properties is the possibility to vacation at other similar properties within the resort network. As companies become linked by participating in fractional vacation exchanges, fractional property owners now have the chance to use their time at other similar properties such as timeshare owners that are part of a resort group.

In conclusion, there are many differences between traditional timeshare ownership and fractional ownership. These are just a few of the main differences so that you can better understand and make a decision if you are considering purchasing a traditional timeshare or fractional property. Which investment type makes the most sense for you?