Fractional Ownership Vs. Timeshare

Fractional Ownership

Timeshare Ownership

Length of Stay

Fractional ownerships are usually sold in shares rather than weeks because owners typically stay at the location for several weeks or even months during the year. Fractional ownership typically isn’t even sold for less than six-week increments. A “quarter share” is a common term among fractional owners as it refers to three-month access to the property (i.e. a quarter of a year).

Timeshare ownership typically is only one or two weeks of vacation at a location each year, or even every other year depending on the timeshare purchase agreement.

Price

Due to the extended-stay model of fractional ownership, it is typically more expensive than timeshare ownership. Annual maintenance fees are often much higher as well because the owners are staying for a longer period of time.

Timeshare ownership is typically less expensive than fractional ownership because the length of stay is so much less, and individuals occupying a timeshare for one or two weeks pay less in maintenance fees than with longer stays.

Annual Fees

You can expect the annual fee for fractional ownership to be about $1,200 per week, and since fractional ownerships are sold in 6-week increments (and above), the annual fee would be about $7,000. 

The average fee for a timeshare week is about $1,100 per year.

Number of Owners Per Year/Per Unit

Due to the longer stays, fractional timeshares are typically shared among 10-20 owners per year, although as few as 4 may share ownership if all parties own a quarter share.

If a timeshare unit is sold every week of the year, it can have 52 different owners. However, the total number of owners for a unit varies based on how many parties own weeks of that unit. 

Level of Quality

Fractional ownership typically brings with it a high-quality unit due to developer investment into units, the types of amenities, and the location of the resort. Longer-stay ownership lends itself to this type of quality. 

While not low-quality, many timeshares feature a typical resort atmosphere and are associated with a known hospitality brand. 

Exclusivity

Fractional ownerships can give individuals access to exclusive resort amenities not available to other guests at the resort. Some of these amenities can include a dedicated concierge to book tee times and other activities for you, as well as laundry services and access to stored equipment such as skis or golf clubs. 

Timeshare owners may have access to lounge areas or other amenities not available to other resort guests. Owners also have preferred booking status, especially in the case of fixed week ownership.

Exchanges and Points

While points are not common with fractional ownership, they do exist and can be used for vacation stays or exchanged for other time periods or locations. Fractionals have exchange providers such as The Registry Collection that work specifically with fractional properties.

Timeshare exchanges can be made through a timeshare exchange provider like RCI, II or 7Across. Points ownership can also be used for external exchanges through these providers as well as within the respective vacation club network. 

Resale Value

Fractional ownership typically hold its value better than timeshares due to the vacation home/deeded ownership structure of the property, the longer-stay model and greater investment into the property overall. If looking to sell, fractional ownership is a desirable purchase for a potential buyer.  

If you purchased your timeshare through a resort developer, it typically depreciates in value over time due to built-in resort marketing costs and commissions. But that doesn’t mean you can’t get a good value for your timeshare resale! It depends on the individual timeshare and resort.

Financing Options

Some banks confuse fractional ownership with timeshare ownership and decline financing requests. However, this confusion may improve as banks better understand the differences between the two types of ownership. 

It’s easy to get financing when purchasing timeshare at a resort, although the interest rates are fairly high – up to 15-18%. You can access financing for resale timeshares through banks like First State Bank and LightStream.