Frequently Asked Questions
Frequently Asked Questions
Q
What is Fractional Ownership?A
Fractional ownership is a legal structure that allows like-minded individuals to buy high net worth properties in 1/4, 1/6 or 1/8 shares which greatly reduces the price compared to traditional full ownership.
Q
Does the price of the property increase when sold on a fractional basis?A
The price of a property increases when sold on a fractional basis to cover the extra work involved in selling to more than one purchaser. Our model dictates a 20% increase in the value. However this is not a surcharge to the purchasers as this represents the open market value of the fractional share and if sold will always be at 20% over the whole ownership value.
Q
Why do the fractional homes have to be furnished?
A
As there is more than one owner to a house the house has to be sold with everything that an owner would require. The furniture and accessories are very comprehensive and will be of a very high quality but represent excellent value as the fractional purchasers only pay a share of the costs each.
Q
Who provides the furniture?A
Fractions Abroad work with the developer and will use the services of a professional furniture company that have a proven track record in providing high quality furniture. The fractional purchasers enjoy the benefits of the developers buying power.
Q
What happens to the 20% increase in property value?A
There is more work involved for the developer, the selling agents, the management company, the furniture provider and Fractions Abroad who prepare and provide the sets of fractional contracts when a property is sold on a fractional basis. To cover these costs the property is sold at a 20% increase which actually represents the open market value of that share.
Q
Who pays for the furniture?A
The furniture costs are added to the cost of the property after the 20% fractional increase in value has been accounted for. This is then divided by the fractional owners which represents great value for money for the fractional purchasers. Purchasers don't have the headache of furnishing the house and get very high quality furnishings at a fraction of its cost.
Q
Why does the property have to be managed?A
As there are four to eight owners to the property a structure has to be in place to manage all the aspects of the house for them. The owners will expect the property to be looked after and cleaned prior to their use. This is huge benefit to purchasers as the property comes to them fully managed at a fraction of the cost.
Q
Is Fractional Ownership an new idea?A
No. Fractional Ownership for property is very established in the USA and Canada. The USA fractional property market in 2007 was valued at close to $2billion. It is a relatively new but ever more popular concept for the UK and European property market but even here it’s an accepted and established ownership vehicle for yachts, planes, helicopters etc which are of comparable value.
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