Fractional Ownership vs Timeshare - Differences Between Each
Fractional ownership is the new kid on the block when it comes to shared ownership of a real estate asset in a resort complex. On the surface it functions essentially the same as a timeshare, but the two do have some differences. The chart below should help identify these differences.
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Fractional Ownership |
Timeshare |
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Origins |
The term “fractional ownership" in relation to vacation property was first used in the U.S. by the Rocky Mountains ski resorts in the early 1990s. |
The term “timeshare" was first thought up in the early 1960s by a company called Hapimag in Baar, Switzerland. |
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Length of stay |
A fractional ownership is usually sold in shares rather than weeks because an owner will typically stay for several weeks or months at a time. A “quarter share” is a common term amongst owners. It refers to the owner having access to the property for three months a year. |
Most timeshare owners own one or two weeks of vacation time a year or every other year. |
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Price |
A fractional ownership can be significantly more expensive than a timeshare. Annual maintenance fees are usually much higher as well because owners stay for longer periods of time. |
A timeshare is often significantly less expensive than a fractional ownership. |
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Annual fees |
Average is about $1,100 per week of annual use. Fractional ownerships aren’t typically sold in less than 6 week increments, so this adds up to about $6,600 a year. |
Average is about $845 per week of annual use. |
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Number of owners per year per unit |
Usually 10-20. Though, as few as four may share ownership. |
Up to 52. |
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Quality |
Generally higher quality due to developer investment into units, amenities and unique resort locations. |
Quality is higher than a hotel, but typically lower than a fractional ownership arrangement. |
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Type of resort |
Typically, a more unique, boutique type of resort. Doesn’t always have a brand associated with it. Can operate as more of a traditional real estate product. |
Traditional resort and more likely with a hospitality brand associated with it. |
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Exclusivity |
A fractional ownership owner may have access to exclusive amenities and services not available to other resort guests or, if a mixed-use experience, timeshare owners. For example, fractional ownership owners may have a dedicated concierge who will book tee times, call drivers and plan activities for you. Staff may also prepare and clean any clothes, skies, golf clubs etc. left in storage from previous stays at the resort before your arrival. Additionally, a fractional ownership will more likely be an adults-only experience. |
Timeshare owners may have use of dedicated lounge areas or amenities not available to resort guests. |
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Exchange and points |
Points aren’t too common with a fractional ownership, but they do exist. Registry Collection is the fractional exchange version of RCI and II. |
RCI, II and DAE are the three largest timeshare exchange providers in the world. |
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Resale options |
Typically holds its value better than timeshares. |
Typically depreciate in value if bought from a developer. |
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Financing options |
Some banks confuse a fractional ownership with a timeshare and decline requests for financing. However, this may change as banks better understand the differences between the two. |
Easy to get financing through the resort at interest rates as high as 15-18%. Financing is available for resale timeshares through the following banks: |
Which Should You Choose?
The answer to this question will likely come down to your budget and availability. If you can afford 6-weeks of annual vacation time in upscale resorts , you may way want to look in to a fractional ownership arrangement. If you’re looking for a high quality vacation for one or two weeks a year at a bargain price, a resale timeshare would be the way to go.
Browse our complete list of resorts to view thousands of resale timeshares and fractional ownerships available for sale and rent by owner.
