Fractional ownership - where's the catch ?

macman

'Can be sold at any time'.
How exactly (to who), and at what price, and with what fees?

Colin_Hunt

Run, keep running, and dont look back.

droopsnoot

I looked at this as well, it's not the same as timeshare in that you do own a proportion of the property you've bought, not just the right to use it for a specific period of the year. In a way that's good because you actually have some ownership rights (as long as the property exists of course) and if it increases in value and sells later, you get a share of the profit, but it can also bring negatives, such as what if the other owners want to do something that you don't agree with. I could foresee getting into the position where you're being forced to spend money on some development or improvement you don't want to, simply because you're a part-owner.

I'd forget about any buy-back clauses - as others have said, it's a simple matter to just fold the company prior to any of the buy-back dates arriving, so you have no come-back. I would think selling just your share will be as difficult as selling a timeshare, though I guess that would depends on whether the other 12 people always use the same weeks every year - in that respect, it would just be like a timeshare.

It was quite popular when there was an acceptance that property would just keep increasing in value year on year and the buy-back made the assumption that the company would be buying a share of the property that's now worth more than they're giving, so can turn it round to someone else. Assuming that they're not just con artists of course. To put it in perspective I used to get several emails a week about various fractional investment schemes, I get none at all now.

If you want to do it, you might be better off finding some like-minded friends (I don't mean joining up with strangers) who are interested in a shared investment. Harder to get it down to the price you're looking at here unless you know lots of people, but less likely to be shafted.