Fractional ownership FAQs:
How does fractional ownership work?
In fractional ownership, you own a share of the real estate itself and are issued a deed for the Property, not a time that you can use the home. This keeps the costs lower than whole ownership, but you still have access to the home if you are satisfied with the sharing model.
Is fractional ownership a good investment?
Compared to Traditional Real Estate , Yes. With fractional ownership, your share of the real estate rises as the value of the home rises with the market, just like whole ownership at a very low risk and management cost.
Traditional Real estate have a very unorganized secondary buying market whereby someone is buying the home from the Agent not directly from the owners, at many times more then one agent involve which add up to the total deal price and make it tough to sell. rather, in a fractional ownership seller has a its own community of co-owners through which he can directly sell his share to them conveniently and hassle free.
Can you get a mortgage for fractional ownership?
Yes and no. As it’s still not a widespread financial product, you’ll have to seek out banks that offer mortgages for fractional ownership, as it’s not likely regional or smaller banks would have the systems in place to offer such a loan. However, they are out there.
Fractional Ownership: Pros and Cons
Just like its traditional real estate and vacation rental predecessors, there are of course some drawbacks to fractional ownership. Here are a few of the most pronounced advantages and disadvantages.
Pros It’s more affordable
Perhaps a 1crore home is out of reach, but 10 lacs is right in your wheelhouse. Fractional ownership lets you get the home you want in the most desirable location at the price you can afford. This goes for home upkeep and maintenance, too. By sharing the costs of upkeep, fractional ownership makes long-term ownership a much more realistic possibility.
The home will get some love
No home should sit vacant 48 weeks out of the year. By sharing the ownership, the home will be opened up at regular intervals. Opening and closing windows and doors, running the water, turning on the AC and heater, using amenities like the hot tub and pool—all of these are essential to maintaining the home. It provides an opportunity to identify issues early on and preserve the home’s long-term value.
Peace of Mind Fractional ownership also means sharing the burden of home ownership. Rather than a single point of failure (i.e., you), you essentially have a group that shares accountability, schedules maintenance, checks on the home, and divides the work and chores that would otherwise be left to a single owner.
But as with anything, there are downsides to fractional ownership.
Cons Renting can be a tedious task In fractional ownership, selling isn’t as straightforward as whole ownership. While it’s by no means as hard as daily rentals, you’ll have to do research to check on how the ownership is structured and what restrictions may apply with regard to your opportunity to rent your share.
You’re tied into one location
In most cases, fractional ownership is tied to one property. If you or your family likes variety, this arrangement can be limiting. Some properties are part of an exchange program, allowing owners to trade their nights for another location with equal value.
But most owners find it very challenging to match the location with the time of year they like to travel.
So, what came next?
We’ve seen what happened to Traditional Real Estate over the last 10 years, and we’ve seen the bumpy road vacation rentals have taken—with an uncertain future. Now, with fractional ownership on the rise, a new form of ownership that began in early 2020 By an innovative vacation home investment company, has demonstrated success in offering the best way to own and enjoy a collection of premium vacation homes in a diversified Manner.
BRIK itt- Real Pride of Ownership
Buying into a BRIK offers accredited investors the chance to see returns from traditional real estate appreciation through a diversified portfolio of luxury residences around the world. And just like fractional ownership, the homes in the portfolio are yours to use when you want and are only available to other BRIK-Owners and then to the General Public or Guests.
So, you get the returns of a passive investment vehicle, the control and peace of mind of a Property manager, and the joy of a vacation home, without ever actually having to take care of it, decide how or when to sell it, or come to a consensus with other owners. That’s the perfect combination for luxury vacation home ownership.
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