Fractional ownership of vacation property is gaining a lot of traction in the real estate sector. It is quickly becoming an effortless and alternative way to enjoy co-ownership of a vacation home abroad.
Anyone who has gone down the outright ownership route when buying their idyllic abode abroad (and, if they’re honest with you) will allude to the substantial amount of work involved, from the sales process of buying in a country where you are not necessarily au fait with the language, to the property laws, taxes, and ongoing upkeep and management of your home away from home.
Fractional ownership or co-ownership, on the other hand, is simply buying a fraction of a holiday home with fellow co-owners and splitting the property’s usage ( and, more importantly, expenses) between all owners. In this article, we look at what type of people buy fractional ownership vacation property and what lifestyle might suit this method of owning a luxury vacation property.
The Simplicity of a Fractional Ownership Vacation Property
While more and more people today understand the straightforward concept of fractional ownership in real estate, a minority still confuse it with Timeshare, overlooking the noticeable difference: With true fractional ownership, you own a share of the company that owns the property, whereas with Timeshare, you own nothing except the right to use a period of time each year. You don’t own a piece of the asset and, therefore, cannot benefit from any capital growth. Why not read more on our blog–Fractional Ownership vs Timeshare: What’s the Difference– where we discuss the differences in greater detail?
Who Buys Fractional Ownership Vacation Property?
Let’s take a closer look at the co-owners. Who are they, and what do they do? What lifestyle solutions does co-owning a property give, making it a more favorable option over purchasing a holiday home outright?
1. Retirees
According to a 2024 survey by MassMutual, the average retirement age in the US is 62, compared with 65 in the UK. (The current UK state pension age of 66 will rise to 67 and further still to 68 in the coming few years.) It is understandable that after a lifetime of working, retirement brings an opportunity to slow down and appreciate what’s important in life. Whether that’s exploring the European culture and historical delights of Italy and Greece or savoring the sunshine along the Spanish Costas, co-owning fractional real estate allows the opportunity to visit stunning locations at different times of the year with the opportunity to travel more with family and friends.
With a fully managed property, you have peace of mind that you will not need to undertake strenuous maintenance over the property’s lifetime. A vacation home should be just that – a fabulous opportunity to enjoy a vacation from the get-go, every time, without losing precious time on the upkeep of the property. Buying a vacation home through fractional ownership guarantees exactly that and offers a hassle-free and lower investment opportunity to spend time abroad in your home-away-from-home, leaving you plenty of time to explore and relax. After all, isn’t that how retirement should be?
What retired co-owners say
Our original idea was simple, purchase an inexpensive property in southern Italy and renovate for our own destination vacation spot. Time is the fire that consumes us. Our age and declining health changed our capability…our solution, a complete move-in ready Amalfi Coast villa with a view of the Mediterranean – JR, California
2. Time-Poor Professionals
While this sector of working professionals can often afford a high-price-bracket luxury pad, more often than not, this is the demographic that either does not have the time or the inclination to deal with any of the ongoing upkeep, maintenance, and general admin that comes with running a property overseas. Vacations and time away from work are cherished, and the non-negotiable is to be able to turn up to a vacation-ready property on every visit without having to lift a finger.
Fully managed properties come as standard with fractional vacation properties. Every part of making the houses look spectacular is taken care of ( by someone else!), from cleaning the pool, tending to the gardens, and maintaining the property inside and out. When you turn up, the property will be sparkling clean and freshly laundered towels ready for your relaxing dip, or with a fully stocked pantry in some cases, so you can settle right in without thinking about shopping. Property management is so much more than you might initially think and goes a long way to ensuring a stress-free vacation on every visit. Read our blog on choosing property management for a stress-free vacation to see just what is taken care of in a fractional ownership vacation property.
Busy professional co-owner testimonials
We both had parents who owned holiday homes. We witnessed the time and effort it takes to upkeep a property yourself from afar. There is always the feeling that you have to have every holiday there to make it worth it. This is a tie. 4 weeks a year in one place is perfect for us – Camilla, UK
3. Families
If you have children, you will, at one point or another, undoubtedly suffer the frustrations of trying to book family vacations with multiple rooms or a high-cost villa rental to get that family vacation time that’s not crammed into one or small adjoining rooms.
The reason more and more families with kids of all ages are turning towards fractional ownership of vacation property is relatively simple. A large villa with, let’s say, five bedrooms and five bathrooms will not only mean that your teenage children get to have their privacy but also that the social spaces inside and out meet the needs of that family time. Such a high price tag piece of real estate that you, in reality, will only frequent on average four weeks a year doesn’t make financial sense to most families. Opting to co-own a beautifully restored villa with an infinity pool and glorious inside and outside living for a fraction of the price makes complete sense to those with children and extended family.
Have you heard the saying that we have 18 summers with our kids? Yep, you heard it – just 18 summers -if we’re lucky before they fly the nest and become independent travelers. So, if you’ve been putting off exploring the incredible beauty of Italy, the historical wonder, and the glittering coastlines of Greece, can you afford not to look into owning your slice of vacation heaven right now and get those special times in the family memory bank?
Family Co-owner Testimonials
We wanted a home where we could always have a 2-week holiday with our 3 daughters and their partners/friends but then a couple of weeks to ourselves. The minute you arrive, you are on holiday! – Matthew, UK
4. Solo Buyers
Buying real estate isn’t always without complications, and if it’s a second home or vacation home overseas, navigating the process alone can often seem daunting. Fractional ownership of properties through small developers fosters a closer relationship, giving peace of mind to those looking to make a lifestyle purchase. Knowing that a property professional is at hand to guide you through the steps of buying, especially in a country where you may be unfamiliar with the local language and laws, is a significant advantage.
By co-owning a vacation property, solo buyers can not only feel safe in the knowledge that they won’t have the sole burden of all the property expenses to maintain each year but also a comfort to some is that they are part of a community of like-minded people. Visiting the property and the area firsthand on a Discovery Visit means you get to meet the developers, see the property, meet the team taking care of it, and see the location. You can now confidently move forward knowing that all your questions have been answered and will have that initial contact made, making the buying process, should you choose to proceed – a lot more personal.
With a fully managed property, knowing that the team on the ground is there in the background should you need anything is comforting and incredibly helpful in maximizing your stay. Take, for example, the properties featured in Italy. With an Italian property manager knowing everything about the area, you’ll never miss out on a local experience or the best place to eat, drink, or sample the local delicacies!
Once your visit is over and you return home, you can sleep easily at night knowing that your dream home overseas is secure and looked after until your next visit.
5. Experiential Travelers
The typical demographics for this group of buyers are typically between the ages of 30 and 60, who have a thirst for exploring and appreciate high-end property. Seeking new experiences and adventures is top of their list, and connecting with the local area and community is important to this group of property hunters. Usually traveling with a partner or friend, they appreciate staying in high-end properties. However, they would rather have more travel experiences than tie up all their funds in owning a property outright.
With a fractional ownership vacation property, the carefully handpicked locations offer immersion into the local community and all its traditions and experiences. Whether that’s wine tasting from the nearby vineyards, eating at the local restaurant—dishes crafted from locally grown produce—or simply getting to know the locals and finding those off-the-beaten-track secret gems, owning a slice of a vacation home allows the experiential traveler to own a slice of a fully managed beautiful property that is in close proximity to many wonderful places to explore.
Experiential traveler co-owner testimonials
We love the archaeology, rolling hills and views, the Mediterranean way of life, the people and the beaches. There is so much to explore and do. We love the fact that we are not in a particularly touristy area, so we can feel like we are living the life – Camilla, UK
6. Financially Savvy
With property prices rising exponentially every year and interest rates slow to return to their previous low levels, buying a luxury second home overseas costs a considerable amount more than it did just a few years ago. Rural hotspots in the UK have seen at least a 10% rise, and in Italy – especially in Tuscany and the Amalfi Coast, this figure is closer to 15%. Greece is experiencing high tourism growth, which in turn is attracting vacation home buyers, and this is nudging the property increase to over 13%. One thing we can see since 2020 is that more foreign investors are looking to enhance their lifestyle and get a foothold in beautiful locations overseas.
An Economically Responsible Purchase?
Today’s property hunters are evaluating their overall lifestyle and investment alignment when considering high-ticket purchases probably more than ever before. Owning a vacation home and putting down a large percentage of funds to own outright while not having the time to use it all year is often not considered the most optimum financial investment. The question frequently asked is, “Why own 100% of the property that you will, in reality, only get to use 10% of the year.”
Co-ownership has enabled us to have a luxurious holiday home for 4 weeks a year. It is perfect for our needs. We do not want more than 4 weeks but also would not have had the budget to buy such a large and beautiful house outright
By purchasing a fraction of a vacation home, you buy a share of the company that owns the property, meaning you have a freehold slice. Depending on the property split, you may own ¼ or ⅙, or 1/12 share and use it for the corresponding amount of time, equally split between all co-owners. So now you would be putting down much less of your previously considered investment and using it 100% of your available time, giving you a more economically responsible way to get that dream property.
Financial testimonials
We would not purchase a home of this scale in Italy ourselves because we do not use it enough to justify the cost and difficulties of owning property in a foreign country. The co-ownership gives us the benefits we are looking for while splitting the cost with others who appreciate the property as much as we do – Jim, NC
Don’t Do This With Fractional Ownership Vacation Properties
While we have explored six different types of people who buy fractional ownership vacation property, there is a common theme across them all: They have one dream in mind–to own a luxury home away from home minus the obligations and financial burdens that come with it.
So, to recap, here’s why fractional ownership is a popular alternative to buying a high-end property outright.
You don’t have to deal with
- Utilities Payments
- Local Annual Tax payments
- Pool Maintenance (cleaning, water testing, upkeep)
- Garden and Estate Management (Planting, pruning, landscaping)
- Property Upkeep
- Property Maintenance
- Housekeeping (linen, towels, cleaning and laundry)
Does co-owning your dream property sound like a simpler way to get a foothold in a destination you love? Why not contact us for a quick coffee chat? And we’ll happily answer any questions you may have while searching for that perfect piece of paradise.
