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What Is Fractional Ownership?

Fractional ownership is a term that basically describes the partial ownership of a property. In a fractional ownership, two or more individuals own and share a property. Fractional ownership as a concept is quite popular when selling vacation properties.

Fractional ownership is quite easy to understand. A property is usually quite expensive especially if one individual is going to shoulder all of the cost of buying it. With fractional ownership, the property is bought by combining the money of a group of individuals. The individuals then, instead of owning the whole property, now owns a share of the property that was bought. If, for example, a particular property was bought by ten individuals, each individual has a 1/10 share of the property. They will share ownership of the property and will also collectively shoulder the cost of taxes and maintenance of the property.
There is a common misconception that fractional ownership is the same as timeshares. One reason is because both are quite popular options when selling vacation property or resort property. But the difference is that with a timeshare, the individual will purchase a particular amount of time to spend at the proposed property. The individual will not own a portion of the property. In a fractional ownership, the individual will actually own a portion of the property.

When getting into a fractional ownership of property. Sharing will, of course, be a part of the arrangement. The owners will work out how to divide and share the time spent on the property. There are people who actually go into fractional ownership as a way of earning money. For example, if the owner has no plans of using the property, he can rent out the property at the time he is supposed to be using it.

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