Fractional vs Timeshare – We Weigh the Differences

One of the most common questions or misconceptions we hear regarding fractional property investment is, “Is it timeshare?”. The two concepts may seem similar, but we are here to clear up any confusion – fractional investment is not timeshare.

At GPFG we offer fractional investment, which has a heap of advantages and is ideal for small scale investors, first time investors, or portfolio diversifiers. Fractional investors have all the same benefits of property investing – capital appreciation, rental yield, asset diversification, etc – at a fraction of the price. Our fractional options vary between 25%, 50% and 75% ownership. Investors can get a piece of a property for as little as USD $15,000, with forecasted returns up to 25% p.a.

What are the key differences between fractional and timeshare?

Fractional Vs Timeshare

They sound the same, as “buying a portion of a property”, but they are in fact very different. For property investors, fractional ownership has a heap of benefits and long-term returns.

Investor BenefitsFractionalTimeshare
Property ownership rightsNo ownership, only buying a share of time to use the property.
Returns from rental incomeN/A
Guaranteed returns during build phase (depending on developer)N/A
Capital appreciation on the assetN/A
Flexibility on usage & enjoyment of the propertyOften limited to 1-2 pre-scheduled weeks during the year.
Access to property/resort amenities and services, like pools, spas, gyms, restaurants
Clear exit strategy and/or buyback optionsResale value is dependent on market demand.

For more information on GPFG’s fractional investment options, talk to our sales team today.

Fractional is real property or asset ownership.

With fractional investment, you become a co-owner of the property, holding a deed or title to your specific share. This ownership provides you with actual property rights, giving you the potential to generate rental income and enjoy capital appreciation.

In contrast, timeshare ownership is merely the right to use the property(ies) for a specific amount of time each year, but the owner does not own any actual share or portion of the property.

Fractional is an actual investment with returns.

For us, this is the most important difference between the two. Fractional is a financial investment with the potential to earn returns through rental income as well as appreciating property values.

Timeshare purchases, in most cases, offer no income-earning potential and no appreciating value.

“The clear difference between fractional ownership and timeshares is that fractional investors make money and timeshare buyers don’t,” says Chad Egan, CEO of GPFG. “With our fractional options, for example, investors have ownership rights of properties in beautiful Bali or Thailand, where the steady streams of tourists draw forecasted returns up to 20-25%. No timeshare owner can say that.”

Fractional investments appreciate, for higher resale value.

As with smart property investments, fractional investments get more valuable over time. A well-maintained property will go through upgrades, refurbishments and refurnishings to maintain returns and rental income. The property price will also increase steadily with the prices of the surrounding areas. Fractional owners reap these benefits like any property investor.

Timeshares, on the other hand, do not appreciate in value. Moreover, they become less valuable because the purchase is only for the use of time and not an actual asset. Their value at any given time is based on and can fluctuate with market conditions and demand.

Fractional investments offer a clear exit strategy.

Fractional investments have a more clear, more secure exit strategy than a timeshare option.
Fractional properties are easier to sell in their market, as they are seen as tangible assets with a clear ownership structure. This liquidity allows fractional investors to capitalise on their investments when needed or desired.

On the other hand, the value and resale price timeshares are purely based on market demand, which can fluctuate due to seasonality, property deterioration, and any changes in the contract from management or owning company.

Fractional ownership has flexibility for usage and enjoyment.

As an added bonus, fractional owners usually receive a more significant allocation of weeks or usage rights to use whenever they would like, providing greater flexibility to schedule holidays. Buyers have access to all the property perks too, such as pools, spas, concierge services, fitness centres, and more. At Nebu Luxury Resort, for example, owners – fractional and non-fractional – can book a holiday at the resort at 75% off accommodation stays with no blackout dates.

Typically, timeshare properties come with limited usage rights, allowing owners to stay at the property for a fixed number of weeks per year.

Ask our GPFG team about our fractional investment options today!

According to Chad, “When it comes to the difference between fractional ownership and timeshare, think of it this way… Do you want to own property with income and ROI, or do you want to be a member of a vacation club?” The differences between the two come down to the long-term financial benefits, laid squarely upon the ownership rights.

If you are still curious about the benefits of fractional ownership and the options that we have available through our premium partners of Jimbaran Signature by Mercure, Beraban Luxury Lofts in Seminyak, and Nebu Luxury Resort by Ramada Wyndham, talk to our team today!

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