The Pros and Cons of Fractional Condo Ownership

Fractional condo ownership is a way that individuals can purchase a condo jointly with other people. When you engage in this activity, you will own a fraction of the condo and will use it for a specific amount of time every year. This is similar to a time share arrangement, except that it is with higher end properties. Here some of the pros and cons of fractional condo ownership.

Better Properties

One of the big benefits of fractional condo ownership is that you can purchase more expensive properties than you would be able to buy by yourself. If you tried to purchase a condo with your own funds, you would potentially only be able to get a small unit that did not have all of the features and amenities that you would like. When you put your money together with several other individuals, you can often get a luxury condo that fulfills all of your needs and desires. 

Prepared Vacation 

Another benefit of fractional condo ownership is that you will have a vacation home that is ready for you to use on your designated dates. The management team will prepare the condo for you and they will get everything ready according to what you like. Some companies will even add personal touches such as putting up family pictures that you leave them. With this arrangement, you can get access to the property for several weeks out of the year. In most cases, individuals can only take a vacation for a few weeks out of the year anyway, so having a dedicated vacation property to sit vacantly does not make much sense. 

Management Fees

One of the potential drawbacks of this type of investment is the money that you have to pay in management fees. Every fractional condo ownership program involves a regular management fee for the owners. This fee is used to pay for the individuals that clean the property after someone moves out. This fee is also used to repair the property and keep it looking nice. While this is a necessary evil, it can really be a drain on your budget. 

Sharing with Unknown People

Another disadvantage of this type of ownership is that you have to share the property with several people that you most likely do not know. While there is nothing fundamentally wrong with this concept, it can lead to some problems. For example, if one of the owners of the property is frivolous, they may damage the property repeatedly. This damage will then have to be repaired by the maintenance company. The maintenance company will then pass those costs on to all of the owners. This can make the maintenance fee that you have to pay even higher than it already is. When you own a condo outright, you do not have to worry about anyone else damaging the property while you are away. This adds a level of uncertainty to your investment.

blog comments powered by Disqus