What’s The Difference Between Fractional Ownership And Timeshare?


A timeshare is a room or property you purchase to use for holidays. Most timeshares will include rules about when you can use them. Often you will receive a month’s worth of usage per year for the duration of your ‘ownership’.

The important thing to remember is that when you purchase a timeshare, you will be purchasing time in the property. The property itself will be owned by a company.

Advantages of a timeshare

  • It may be cheaper to own a timeshare than stay regularly in a hotel depending on the location.
  • Timeshares have been around since the 1960s and they have a better reputation now than in the past.
  • The company that owns the timeshare property will be responsible for looking after it.

Disadvantages of a timeshare

  • A timeshare can be difficult to sell on compared to other types of property investment.
  • You will need to spend your holiday in the same location every year to get the best out of your investment.
  • You are unlikely to make any profit from your investment.


Fractional Ownership

When someone purchases a room or part of a property this is called fractional ownership.

Like timeshares fractional ownership properties can be used for holidays. The main difference between them is that a fractional ownership investment is focused on making financial return.

The owner of the fractional share will receive deeds and become a part owner of the property.

One example is the purchase of a hotel room. The owner(s) of the room will receive a share of the revenue generated by hotel guests who stay in the room.

Advantages of fractional ownership

  • If you invest in a fractional ownership property, you will receive regular income from the investment.
  • You can often sell your share back to the hotel for an agreed price when you no longer wish to own it.
  • It is cheaper to own a fraction of a property than buy the whole property and you still get a share of the returns it makes.
  • It is a fully-managed investment meaning that you won’t have to worry about managing or maintaining the property.

 Disadvantages of fractional ownership

  • Using the property for holiday purposes will reduce the returns you make on your investment.
  • While it is a bit more difficult to sell on a fraction compared to a full property, you will often find the added security of a guaranteed buy-back option after a certain period of time.

Join The Conversation - Be The First To Comment

Categories: Knowledgebase / Property Invest


Like What You Read? Stay In Touch

Follow Colordarcy on Twitter or Facebook