So you’re looking to purchase some timeshare and like most others living in this age of informational technology, the first thing you probably will do is to Google it. Immediately, you’re bombarded with listings, information, and real estate jargons that require further Googling. One of the more confusing terms for new timeshare buyers is “fractional ownership” which often pops up concurrently with the word “timeshare”. What is fractional ownership and how does it differ from timeshare?
The main difference lies in the way actual equity is distributed. In fractional ownership arrangement, the buyer actually owns a piece of equity in the property which means that if there is a change in the property’s value, the fractional owner’s share of the pie reflects that change. In a timeshare arrangement, ownership remains with the principal owner. What the timeshare buyers own are weeks or months of enjoyment in a property which do not fluctuate with the changes in the property’s values.
So to fractional ownership or to timeshare? That is the question. There are many benefits of a timeshare over fractional timeshare such as not having to pay taxes, insurance and other fees on the property. Since the property is not your responsibility, you don’t have to maintain it and while you contribute to some of these expenses through your fee, you’re not liable for the property as a whole.