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Comparison of Fractionals to Timeshares

Many people confuse fractionals and private residence clubs with timeshares. In reality they have vast differences.

Fractionals are far more exclusive and include many more luxury amenities and services than timeshares. They tend to be larger homes, usually three to five bedrooms so there is plenty of room for family, friends or clients.

Timeshares are typically for one to two weeks per year. Fractionals offer from two to 13 weeks, and those don’t necessarily have to be consecutive weeks. Cherry pick the weeks you want and choose all different ones the following year.

Financing a timeshare with a bank or mortgage company loan is difficult. Rates can be high, regardless of how good your credit. That’s because most timeshares depreciate over time. Conversely, banks and mortgage firms consider fractionals to be appreciating assets and will often treat them like any other second-home purchase.

Fractionals tend to appreciate because more of the buyer’s dollar goes to high-quality finishes and “bricks and mortar” vs. sales commissions which on timeshares can be as high as 40%-50% of the purchase price.

Furthermore, timeshare resale values have historically been poor because of the large number of timeshare resales on the market and a continuous stream of new developments. At the same time, the secondary market for timeshares has never taken off.

Conversely, there are a limited number of fractionals on the market. Most likely, that number will stay small because of the emphasis placed on building in only the very best, most highly desirable locations. The result is that demand outpaces supply and results in property appreciation. Owners are likely to be able to resell their fractional or private residence club membership at a higher price than they paid.

Fractionals and private residence clubs typically cost far more than timeshares. They are usually in the $100,000 – $500,000 range. Their cost reflect their exclusivity, incredible services, superior locations and ability to appreciate.

Timeshares, in which you purchase a specific week of time to be used each year, typically range from $5,000 to $50,000. Both timeshares and fractionals also require annual maintenance fees.

Interested in learning more about fractional ownership, a new way to own a vacation home? Contact Condo Hotel Center today for information, info@CondoHotelCenter.com or call (954) 450-1929.