Real Estate the Definition of the Fractional Kind

Land for Sale, Fractional Real Estate

Real Estate is always a good purchase because over time property appreciates. There are some really interesting ways to purchase real estate. One of the ways is to purchase fractional real estate. Fractional real estate is buying a part or portion of a property. The portions are fractions of a year ranging from 1/12 to ½ of a year. All real estate sales are regulated by government, fractional real estate is no exception.

There are three different ways to acquire fractional real estate. Each of these methods has its own characteristics. They are purchasing from an individual, purchasing from a resort company and purchasing from a real estate company that has exclusive control of the property.

Buying a fractional portion of a home from an individual comes with challenges. The main challenge is making sure that all parties understand the regulations in the state that the property is in. Another challenge is how the deal is put together, with companies there are policies and procedures with individuals you and your lawyer will have to craft the agreement. The real upside of these properties is if you find your “dream vacation home”. This would help you to put up with the challenges.

Buying a fractional property from a resort company has all the details predefined and professionals to assist in the process. Resort companies span the world and here is where there are issues that you need to examine up front. Fractional ownership in the US simply owns a portion of a deeded property. That is not necessarily what you get with foreign participation. Many countries do not allow foreigners to own real property. The fractional contract looks more like a rental agreement. Another concern is in former eastern block countries clear titles are difficult or impossible. On the other hand the locations are often spectacular. Therefore it is critical to be very cautious when looking at Fractional real estate outside of the US.

The third way to purchase Fractional Real Estate is to purchase properties from a Company that has and exclusive right to market the properties or owns the properties. This limits the people that you have to deal with (no selling agents and listing agents) and makes the process easy and transparent.

So with all these options what to do. I think a person would do well to consider several factors. Where do you want to live, what kind of property that is a house or a condo? Do you want the appearance of a hotel or a residential neighborhood? Another way to ask that question is do you want to live at a resort or in a community that is near a resort.

Owning fractional real estate brings value because the owner has options that really have not existed in the past. With a fractional purchase you can live a private family centric lifestyle, or a resort based lifestyle. You have the choice.

My choice would be a choice that combined the best features of all the options. A private home that was near but not part of a resort.