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Why co-ownership is not timeshare and why it makes all the difference

Posted by FindHomeAbroad on August 18, 2022

At first sight, co-ownership of property (also called fractional ownership) might not seem that distinct from a timeshare. After all, you don’t own the deed to the whole home yourself (usually divided into eight equal parts you can own between one-eighth and one-half), so some people tend to get confused and think it is some sort of timeshare. But, that’s where the similarities end. Start searching the web for information on timeshares, and you will encounter many horror stories. On the other side, look at what co-ownership property owners are saying, and you will hear how much they love their second homes and how they think it is the best move they ever made.
And that’s because co-ownership is not a timeshare, it is true property ownership (but without some of the hassles). More than a quarter of these co-ownership owners are former traditional second-home owners…Many people are asking “what is fractional ownership in real estate” as many have heard of this way of purchasing private jets or yachts but are unfamiliar with fractional ownership for real estate.

Check our properties under the co-ownership system here.

Here are five reasons buying a holiday home under the co-ownership system makes complete sense.

The properties selected for co-ownership are premium properties in the higher-price bracket, and we all know that higher-end, well-located properties tend to appreciate so much better than smaller, ordinary properties over time. You sell your part at market value anytime you want, after a couple of years, ten years down the line or …never (properties in France or Spain are freehold).

Not just any property can be part of our selection. We seek out the best properties in the best locations — each one is different, and all of them have that special “wow” factor. Then our professional interior designers get to work, selecting the perfect furnishings, modern amenities and special touches to ensure your home is a place you’ll feel comfortable and relaxed whenever you walk through the door.
A timeshare is almost always a unit at a hotel or an apartment complex lacking individual qualities that can make homes so special. Think cookie-cutter floor plans and typical hotel-style furniture. You might have neighbours on both sides, above and below — hopefully, the soundproofing is up to scratch.

A limited group of co-owners enjoy the property.
Because most fractional ownership limits the number of shares per home to eight, you and just seven other owners (could be your parents or some relatives or just friends), at most, will have access to the property (only you will occupy the property at a time, of course).
Incidentally, this system of the company holding divided into shares (SCI type) was used for that specific purpose when members of the same family or friends wished to acquire a property together.  The system is perfected nowadays as you have a house manager and a reservation app that will remove the personal frictions between members of the same family or friends. Potential owners are vetted, and cleaning is done before each stay, so your holiday home is spotless when you arrive.

A timeshare unit may be shared by 52 other people — one person or group for every week of the year.

You own property, not time.

One of the biggest differences between co-ownership and a timeshare is what you actually own. With co-ownership, you own an actual property asset. Your share is real property, not simply a block of time. And because it is a property asset, its value will move with the market — which means that any equity gained is yours. Also, as we mentioned, premium properties tend to appreciate better over time.
When you purchase a timeshare, you typically own the right to use the property for a set period of time, not the property itself. That’s why you can’t usually get a conventional mortgage to purchase a timeshare — there’s no “home” as collateral, only time. Financing is offered through the timeshare company, often at a high-interest rate, and some buyers secure funds through a personal loan or home equity loan. Because a timeshare is not a property asset, you will likely see the value depreciate, much like a new car begins to lose value once it’s driven out of the dealership.

You can use your home year-round.
Each share gives an owner ongoing access to their home, and most owners stay 6-7 times yearly. You aren’t locked into a specific week or weeks each year, and you don’t have to schedule weeklong stays. You can enjoy a weekend getaway or a mid-week escape, and you have the flexibility to plan stays anywhere from the last minute to 24 months in advance on average. Short-notice stays can be booked just two days in advance! You’re also guaranteed one special week, which includes school holidays, Christmas and other bank holidays. You may not get your first choice every year, but since you can book dates up to two years in advance, you’ll always have another opportunity to bag your favourite. You book time at your home using the online app. It’s easy to use and equitable for owners, based on the number of shares you own.

When you buy time at a timeshare, you’re often locked into a fixed week, year after year. You may have a “floating week” option, but your choices are still restricted to various dates. With either option, you can only check in on certain days, and you typically must book a full week. There are exchanges and point-based systems which allow you to choose different resorts, but you’ll often pay extra for more desirable locations, and availability can be limited. If you have a fixed-week schedule, you may never get a particular holiday week if another owner has already locked it in.

Easy resale and exit strategy
We think you’ll love your second home for years to come — but when it’s time to sell, we want that process to be as smooth and straightforward as the purchase process. You set the price you want, and we can market and list the home for you, much like a traditional property listing. Because most co-ownership properties are thoughtfully selected and located in some of the most desirable holiday home markets, we’ve experienced strong demand for this type of share.
On average, shares resell in fewer than ten days, with a 10% gain, on an annual basis (source: Pacaso 2021 United States resale price data as of Q3 2021).
For timeshare owners, resale is one of the biggest sources of stress. There’s a supply and demand imbalance, with a glut of sellers trying to get rid of their units (and the accompanying resort fees) to a smaller pool of buyers. There is a resale market, to be sure, but most people end up selling at a huge loss — you’ll find sellers on eBay asking just a few hundred euros (or less!) for their timeshares. There’s also a whole industry of timeshare exit companies that will help you offload your timeshare for a fee — and, unfortunately, many of them have been known to take advantage of sellers. According to U.S. News & World Report, you should “buy for the memories,” not because you expect to turn a profit.

Experience the joy, not the regrets
Purchasing in co-ownership offers exceptional holiday homes in top locations. The pricing and costs are transparent and equitable, and you’ll never be surprised by hidden fees or bound to a rigid schedule. Instead, you can enjoy your own private, luxurious oasis throughout the year while the house manager takes care of maintenance and property management. View our listings to get started.

Check our co-ownership properties

Here below is a comparison between traditional purchase of a property and fractional ownership in real estate (and how you can build a collection of premium properties for less than one property):

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