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Fractional Ownership Real Estate. Luxury fractional ownership properties in the world's best locations. Use it anytime! Share the costs. Deeded equity interest.

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 Frequently Asked Questions About Fractional Ownership.

Please click on any question below.

  • Why 1/8th shares versus more, or less owners?

    • Many forms of vacation property ownership, such as most time shares are based on just a few weeks of use per year. This effectively becomes more like a prepaid hotel vacation. True pride of ownership can only come from the exclusive right to use your property on a more frequent basis. With 1/8th share deeded ownership, you will have the right to use the property as often as you wish, subject to the tiebreaker rules. You'll enjoy usage throughout all seasons, providing you a complete appreciation of your property and the rewards and activities of the community. Studies have determined that the average 2nd home is used less than 30 days per year. Our 1/8th share ownership, provides you with the optimum amount of usage time, while not burdening you with more upfront out-of-pocket cost, ongoing expense or use time than you may need. Meaningful and fulfilling ownership, not limited access that doesn't make sense, and doesn't provide you with the real benefits of a vacation property of your own.

      Please note, while 1/8th is our most popular ownership structure, some of our Fractional Villas® are offered in 1/4th, 1/6th, 1/7th, 1/10th and 1/12th interests, depending on local zoning codes and market conditions. In these cases, all documents and operating agreements are adjusted accordingly along with the frequency of use.

  • Can I buy more than one share?

    • Yes, you may purchase more shares to allow you and your family more frequent use of the property. You can also buy additional interests as they may become available in the future from your fellow share owners, or you may sell your fractional ownership interest to another owner, or any third party, at the then fair market value. 

  • How many days per year do I get to use the property?

    • You are not limited to any particular amount of use of the property.  You can use the property as often, and as much as you wish, subject to the rules of the Priority Reservation System established for your property.  Each of the Co-Owners has an equal right to use the property.  You are guaranteed your respective proportionate use of the property each year. In some years, some of the Co-Owners may wish to use more time than in other years; and in some years, less time.  For example: if your property has 8 Co-Owners, and each Co-Owner used the property equally, they would enjoy approximately 45 days of use per year.

  • How do I know my schedule for use?

    • With our Priority Reservation System you will be able to plan ahead, years in advance, knowing exactly when you have the highest priority making it optimum for you to make your reservation. Or, you may use it on a moment’s notice, subject to availability, and your priority over other owners for a certain week. One week per year, in the spring, is reserved for routine maintenance and deep cleaning. This provides for 51 weeks of total owners occupancy, per year, or if used equally in a particular year, just under an average of 7 weeks per owner. For more information see our Priority Reservation System.  

  • Can I use the property on holidays? 

    • Each owner will have the highest priority for every specific holiday and every week of the year, once every eight years. This means that you will have an equal opportunity to reserve the property on those holidays that are important to you. Owners may independently swap their priority, or scheduled time with each other, combining weeks, or opting for time that better fits their respective schedules. Either way, you won't have the customary frustration of not being able to spend more time at the property, knowing that it won't be vacant for long, or unused, while still providing you the option to use it throughout the year. 

  • As a fractional interest owner, will I have exclusive use of the property?

    • Yes, the property will be exclusively yours to use for up to one week at time. Weekly periods begin on Monday afternoons, and end on the following Monday mornings. The housekeepers completely clean the property and prepare it for each owners’ arrival. You may arrive any time after the scheduled arrival time. Many owners will skip the weekdays and arrive for extended weekends only. Thus, another owner may use the property, on those days when you are not, maximizing everyone’s use. In some years you might end up using the property 10, 15 or even 20 weeks a year, when other owners don‘t wish to use it as much! For more information see our Priority Reservation System

  • Where did the concept of fractional ownership originate?

    • The concept isn't new, but the term "fractional ownership" is.  Friends, relatives, and business partners have been pooling their resources to buy a second home for centuries.  In the early 1990's, fractional ownership of private jets became popular, followed by yachts, then luxury vacation homes.  According to the National Association of Realtors, in 2004, "36% of all home sales were second homes purchased for either vacation use or investment".  Despite the current market slowdown, the interest and demand for fractional ownership is growing every year, as more and more consumers discover that they can have their proverbial dream vacation home, without all of the expense, hassle or guilt!

      Fractional Villas® recognized the need for an exclusive vacation home, where a true sense of pride of ownership exists; and the benefits of making a wise purchase can be realized with an eighth-share fractional deeded ownership, instead of a club membership in an elusive complex, with ever changing properties. Whether it’s a vacation villa, private jet, or yacht, fractional ownership is proving to be the best way to purchase and enjoy high-value assets that you don't use fulltime.

  • Can't I just find a property and purchase it with my friends?

    • You can, however, with Fractional Villas® you don't need to convince 7 others to buy a share in your dream vacation home, which as most people know, can be very difficult. Further, you will need to prepare a comprehensive set of CC&R's, operating by-laws, rules and regulations, as well as all of the legal and HOA documents for purchase and shared ownership. Instead, with Fractional Villas® you can just make your own decision to own a share in a larger and more luxurious villa, than you could normally afford, in an area where you would otherwise be priced out of the market. With our typical Fractional Villa, you'll own a 1/8th share with 7 other proud owners, not hundreds, like with the "residence clubs" or timeshare properties. We do all of the work, and take all of the risk, identifying the property, furnishing it, appointing the property manager and a team of maintenance professionals, preparing all of the legal documents correctly, and marketing the property to just 8 exclusive owners. 

  • How does fractional ownership primarily differ from the economic considerations for wholly owned real estate?

    • Primarily, fractional ownership allows you to afford a much more luxurious, elegant and larger vacation property than you would normally on your own. All costs and expenses are all divided and shared amongst the owners vs. carrying the burden by yourself. Ownership is evidenced by a fee simple "Tenants In Common" grant deed to the property, backed by title insurance, exactly like the home you live in now. However, you still enjoy all the benefits of real estate ownership. This is a true value catering to discriminating investors who are looking for a second home but really don't want the full burden of owning a second home. The more expensive the property, the more fractional ownership makes financial sense! 

  • Are there legal agreements between the co-owners?

    • Fractional Villas® has developed, what is considered one of the "best set of proprietary fractional ownership documents" in the industry, from the "co-owners point of view". Each property is owned, governed and operated by a very tight package of legal agreements that remove virtually all ambiguity and questions for each of the owners. These agreements help to assure each owner of their independent quiet enjoyment, legal control, property rights and ownership protection. Without these agreements, a group of owners would effectively be operating on a handshake, with faith that everything will work out. This may work for friends and family (until there is a problem), but a handshake cannot be relied on for independent owners, brought together under this sophisticated structure.  We are confident that after your review, you will agree that virtually every concern has been addressed and prescribed for the benefit of all co-owners, assuring a very safe and enjoyable ownership experience. 

      This package of documents is tailored specifically to each property and the local municipal codes, and is made available to each buyer in escrow, during their contingency evaluation period. 

  • Who are fractional properties really for?

    • This type of vacation real estate ownership is ideal if you want the benefits of owning an impressive second home (typically of more value than you would afford on your own), complete with management services, located in a very exclusive community, but you can't justify whole ownership because of your projected limited use. 

      Most fractional owners are frequent visitors to the resort area, and want something they can call "their own", with friends and family members. These buyers aren't looking to be sold vacation time, but instead want an upscale vacation property without the responsibilities and costs associated with a wholly owned home. Fractional ownership is a lifestyle choice, yet an affordable and sensible way to purchase a second home, providing most of the benefits of true property ownership. With Fractional Villas® , you can own several vacation properties - in several parts of the world - collectively for the price of just one!

      Is co-ownership right for you?

  • How do Fractional Villas® differ from residence clubs or condo hotels?

    • Both offer luxurious accommodations and services for the person seeking a vacation home. However, the residence club/condo hotel tends to be an individual room or suite located within a major multi-unit complex. In most cases, the ownership is of a "like kind unit", meaning you will rarely stay in the same unit twice. Effectively, you have bought a “floating floor plan” in the complex, even though you may have title to a specific property, or unit. With a Fractional Villa you will own and enjoy the same property, on every visit, not just a floor plan where you float from similar unit to unit. Additionally, a private estate Fractional Villa assures you the highest degree of privacy. No public hot tubs, lobbies, parking lots, or hallways!

      Residence clubs typical "$25,000 annual fees" equate to $555.00 per day, with just 45 days of usage rights. The lost interest (cost of funds) for the typical hefty, non-interest bearing $350,000 to $400,000 membership fee adds another significant cost. At just 5%, your cost of funds is $20,000 per year (lost interest that could have been earned in a typical Certificate of Deposit). So, your combined effective cost of funds and annual fees, per year, is about $45,000, before resale fees.  

      Under most club plans, if you wish to cancel your membership, they charge a significant 20% resale fee. Only 80% of the original fee is refundable should you decide to resign your "club membership" So, lets say you retain your membership for 10 years, that's another $80,000 charge tagged onto the end (resale fee), or about $8,000 per year. Effectively, under this scenario, you will have paid about $48,000 per year. That's $1,066 a day for your use with no equity upside!  

      What would that $400,000 have made in equity, when leveraged into a fractional deeded, "fee" ownership interest in a resort property, over the same 10 years? 

  • How is the home furnished?

    • Professional decorators have furnished each home in a first class, upscale style, befitting each locale and the architecture. Not trendy, and not tacky. Elegantly appointed from luxurious furniture, to paintings and museum quality panoramic photographs of the local area, decorator touches, draperies, dishes, appliances, cooking gear, linens, towels, comforters, even separate sets of summer and winter bedding. Every detail is thought out to make you feel at home – in some ways better than home. Even board games, pool tables (subject to space), and outdoor toys from mountain bikes, to sleds, pool floats and beach toys as appropriate for your locale, are all provided. No reasonable cost is spared, and nothing is overlooked!

  • Can I have guests stay at the property?

    • Unaccompanied family, friends, business associates, or anyone else you designate, can use the property as your guests, provided you have the highest Reservation Priority for the subject week of use.  Guests are treated as family and may join you anytime, or use the property should your schedule not allow you to attend at the same time. Guests shall be your responsibility and required to respect the CC&R’s, Bylaws and Rules & Regulations.

  • Can I rent out my unused time?

    • Certain villas do allow for the rental of your priority time, however, many do not. In those cases, only owners and their direct guests may use the property. This also helps maintain less wear and tear on the property, and makes its use more personal and exclusive. With rental potential, some villas may qualify for 1031 exchanges, and additional tax benefits, that your professional tax advisor will need to determine for you. 

  • Can I exchange my priority time with another Co-Owner of the property?

    • You may exchange your priority time with any other Co-Owner to combine weeks, or to reserve your use of the property when it better fits your schedule. 

  • Do I have the same tax considerations with fractional ownership as with purchasing the entire property exclusively? 

    • Fractional ownership is the same as ownership of any other real estate, wherein you enjoy potential appreciation, depreciation, interest and expense deductions. At your discretion, you may sell your share of the property, gift it, or leave it to someone in a Will. Your tax advisor will be better suited to provide specific details, and advise what your individual tax circumstances may offer. You may also register title in your children’s names to assist in estate planning. 

  • Are there concierge services available to me?

    • Personal concierge services are available to every owner as desired. Prior to each owner's arrival, the property manager will be certain the toiletries and linens are well stocked, make sure the heating and air conditioning is set at your preferred temperature, have your personal framed photos placed right where you left them on your last visit, instruct the housekeeper to store your vacation clothes for you in a secure storage area, and put them back in the closet before you arrive. At your direction, for an extra fee, our Property Concierge will be sure to spoil you with all of the frills, from personal grocery shopping to stock the fridge and kitchen with your favorite foods and beverages, to a providing a butler, a private chef to prepare your perfect party dinner, a bartender, a nanny, a chauffeur to and from the airport or for a night out, a bodyguard or any special security, or just ordering and arranging fresh flowers before your arrival.  Tee times, restaurant or theater reservations, a day of fishing, yachting or sailing, skiing or surfing lessons, a private massage, hair and spa services, laundry, dry cleaning and even child daycare or pet care services are all available to you as an owner of a Fractional Villa.

  • Is there a valet to help me on arrival?

    • Our optional “Meet & Greet” service provided by the property concierge will have a courteous valet meet you at the property upon your arrival. They will arrive before you do, adjust the temperature of the house and the hot tub, turn on the lights, shovel any snow on the entry stairs and walkway, light a fire in the fireplace, turn on the music to your favorite selections, help you bring in your luggage, and even pop the cork on your favorite bottle of wine! All you need to do is arrive. No worries!

  • What are the Operating Costs associated with fractional ownership?

    • In addition to the initial acquisition cost, you will share in the ongoing Operating Expenses including the utilities, property insurance, all maintenance, general household and cleaning supplies, toiletries, fireplace logs, interim housekeeping, deep cleaning, repairs, the replacement of all furnishings as needed, security service, bookkeeping, and the Property Manager’s fee.  All expenses are passed through to each Co-Owner on an equal and proportionate basis without markup by Fractional Villas®.  The property manager works on a fixed annual fee, without a conflict of interest.  Only optional concierge services will be billed directly to any owner requesting them on an a la carte basis. 

  • What happens if another Owner doesn’t pay his share of the on-going Operating Expenses, or property taxes?

    • Like a condominium home owners association, if an Owner does not pay their share of any expense, as and when due, the fractional HOA may foreclose on that Owner’s deeded share, following a strict protocol, and reimburse the HOA from the proceeds of the foreclosure. It is unlikely any action of this severity will ever be necessary. In no case, is your deeded share ever in jeopardy by another Owner’s default. The buyer of the “foreclosed share” will then step into the shoes of the defaulting shareowner and thereafter be responsible for that equity share’s respective share of expenses. 

  • Who controls the Home Owners Association?

    • Every Owner is a member of the fractional HOA. Three of the Co-Owners rotate as members of the Board of Directors of the HOA for two year terms each.

  • Who manages and maintains the property?

    • The Home Owners Association (consisting of all of the Co-Owners) hires a Property Manager for annual periods. The Property Manager manages every aspect of the property including  the complete maintenance and care of your villa, the payment of all operating expenses and the annual preparation and filing of the tax return for the HOA.  

  • What do the operating expenses cover?
    • The ongoing operating expense cover the cost of all maintenance, repair, replacements and wear and tear as required. A professional housekeeper is supervised by the Property Manager, assuring the property is always clean and maintained in a first class condition, as you would expect. Landscape and pool maintenance is performed on a regularly scheduled basis by local professionals, and, where necessary, snow removal as required. Structural maintenance, including painting, and repairs, is provided by the appropriate local trade contractors, as and when needed. Certified professionals from the specific equipment manufacturers and services will maintain the equipment and appliances to our demanding standards. When the homeowners are away, the property manager will look after the property, assuring you the peace of mind that your property is safe and secure. 

  • Who is responsible if an Owner damages the Villa?

    • Other than normal wear and tear, each Owner is responsible for immediate repair or replacement of any damage to the Villa or to any of the furnishings, fixtures or equipment, if incurred during their use of the property. 

  • Are housekeeping services included?

    • Each Owner pays for the cleaning of the Villa upon their departure. Housekeeping charges are passed through to the respective Owner at the actual cost charged by the Housekeeper. 

  • Is the property non-smoking?

    • For the comfort of all owners, and maintaining the condition of the property, smoking is not allowed within any area of the home.    

  • Are pets allowed at the property?

    • Owners will collectively decide if their villa is pet friendly and establish a special set of rules and conditions regarding their pet’s access to the property.

  • Can I finance my purchase?

    • Fractional Villas® has arranged with lenders to provide you a mortgage for your purchase, requiring a typical deposit of 20% of the share price. Most owners will, however, either pay all cash, or opt to pay for their share with equity from their primary residence, using a line of credit.

  • How can I sell my share in the future?

    • You may sell your share to any other owner of the property, or you may sell it to any third party. Typically, resale shares are listed with Fractional Villas®, or with a local real estate broker, who will promote the sale of your share the same way they promote any other property for sale. The market for fractional ownership shares is growing, as more and more buyers realize the benefits and savings. You may also sell your share yourself, by advertising in any publication, newspaper, or on the internet at free real estate listing sites. You set the price and are in control of the sale, just like any other property sale.

 

For more information, please contact us at:  info@fractionalvillas.com



Each fractional ownership property listed herein, is separately owned. Fractional Villas® is neither the owner, nor the real estate sales broker of the properties. Each Fractional Villas® fractional ownership property is a separate offering. This is not a solicitation or offering for fractional ownership in those states where regulated. Fractional Villas makes no warranty express or implied as to the merchantability or legality of any fractional ownership offering herein.

The information contained on this website is believed to be accurate to the best of our knowledge. The purchaser of any fractional ownership interest is solely responsible for verifying all information contained herein. Actual Fractional Villas® properties may vary in location, size, bedrooms, bathrooms, character, furnishings, equipment, fixtures, amenities and features. Certain photos featured within this website are for example purposes only. Unless expressly stated in the purchase or operating agreements of any property featured on this website, Fractional Villas is not the property manager, concierge, or scheduling agent, and shall not provide any services related thereto.

Copyright © 2005 – 2015, Fractional Villas, Inc. Terms of use of this website. All Rights Reserved Fractional Villas, Inc. Del Mar, CA 92014 Green Ownership and Fractional Escapes are trademarks owned by Fractional Villas, Inc.






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