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Fractional Ownership vs. Timeshares: What Is the Difference?

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Timeshares are a rather well-known entity. We’ve all heard the horror stories of being stuck with one and the fees that go into maintaining it. But there’s another form of property ownership— fractional ownership—that is important to note. For everyone from beginners to seasoned experts, here’s a breakdown of fractional ownership vs. timeshares.

Fractional Ownership

If you look at the etymology of “fractional,” it’s a rather self-explanatory term. As one would gather, fractional ownership is controlling a percentage of any given asset. Individuals commonly use it for properties, such as vacation or rental properties. Typically, this method involves more than two or three owners. Most fractional ownerships consist of six to twelve people, each owning an equal share of the property.

Timeshares

As for timeshares, investors do not own the property—they own a certain chunk of time in which they can use the property. Typically, it’s only for about one to two weeks per year. There are multiple buyers in this instance as well; however, they won’t necessarily have a relation to one another and don’t hold claim over the property. That ownership still stays with the property owner.

Similarities

What’s similar between these two concepts is that they typically involve the same type of property—a vacation property. Another similarity is that it’s far too difficult to get out of either arrangement. Timeshares will certainly lock you in, and it’s logistically difficult to get out of them on your own. The same is also true of fractional ownership. Since you’re dealing with several other owners, it will be challenging to find potential buyers who are going to want to join the deal. In either scenario, you’ll likely feel stuck with a property, and more importantly, you’ll have to pay for it.

Differences

When you have a timeshare, what you “own” is a certain amount of time at the property. That doesn’t mean, however, that you own any actual part of the property. When you have fractional ownership, you own the property, but it’s split between many buyers, with some even having a dozen owners. The main difference, then, is that fractional ownership allows those within it to have some actual claim of the property. Those with a timeshare can’t say the same thing, and unfortunately, they have no true ownership.

 

While there aren’t ample differences, several things separate fractional ownership from timeshares. In both cases, though, it will be hard to get out of your contract. Plus, it’s unlikely you’ll inherit much value from the deal as each option includes increasing yearly maintenance fees.

If you find yourself in a timeshare and you don’t know how to get out, reach out to our Florida timeshare cancellation company. Preferred Cancelation Services will help you take your life—and your financial freedom—back.

Toby Reutter-Harrah