October 21 , 2007
Timeshare was the original "fractional share" where you can buy 1 week of ownership or a 52nd share. Timeshare has ballooned to a $3 trillion industry in the U.S. in the last 20 years and is growing at a double digit pace.
Comparatively Fractional has many lower risk characteristics. It is less risky because Fractions are typically sold in ¼ share or 12 weeks a year; 1/8 share or 6 weeks; 1/10 or 1/12 or 5-4 weeks ownership, so the underlying real estate values are less diluted by sales and marketing expenses. It costs a lot to sell a single condo to 52 different buyers, and timeshare developers often expense 50% of the cost of a share to marketing. A single unit of timeshare or a 1/52 share might sell for $10,000 a week, or $520,000 for the whole property, might have a real estate value of $250,000. A ¼ share of the same condo might sell for $75,000, or $300,000 for 4 quarter shares, representing a 20% increase over the whole ownership real estate value.
Story from www.vacation-finance.com
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