Fractional Ownership - sharedd asset purchasing

Nov. 23, 2009 - PRLog -- Are you dreaming of that holiday home in the sun?  Perhaps you are hankering after a helicopter!  Or could it be a designer handbag?  How can you buy these assets without the full capital cost, and ownership of the full risk? Utopia? No.  It is Fractional ownership sometimes known as Shared Ownership. Using the capability of asset sharing by Fractional Ownership, luxury possessions are within your budget.

For many people, dreams of luxury items remain unfulfilled.  Holiday homes, yachts, prestige cars, aircraft, helicopters even a garden tractor, need not remain a dream but become a reality. You probably do not need them all the time.  Laying idle, they cost you money.  Using the power of Shared Ownership you reduce this cost and profit from any asset value growth.  You invest in them.  

With any investment plan you need to spread your risk.  Fractional Ownership does this also.  Just think of the advantages gained through sharing the cost and risk.  Advantages of lower cost and tax benefits.  .  You select how much of the asset you will purchase and this can be from 1/52 upwards.  The insurance industry model works this way.  In the late 1680s Mr Edward Lloyd opened a coffee-house which became the favourite haunt of ship-owners and merchants.  Today Lloyds of London remains the leading insurance market.  Investors take up fractions of any insurance risk.

The cost of luxury investment- reduced
Just consider the advantages for you of Fractional Ownership.  To start with you receive the asset and save capital cost.  Dreams converted into reality. You opt to buy a fraction of the asset, for example property, and the amount is your choice.   The investor fractions add up but individuals have limited exposure.  For example, with buildings each investor becomes a shareholder with a registration of the deed.  It produces a perfect blend of equity and property investment benefits with a lower capital outlay.  Just imagine – your dream holiday home, available when you need it and earning money for you when you do not.  You own as much or as little as you want too. You can probably share a more luxurious property in a better location.  The shared cost reduces worries about maintenance.  As property values increase so does your investment.  Research shows that most second homes are used for limited periods of the year.

Is there a risk?
Just living is a risk.  Walking down the street is a risk.  But understanding the risk enables you to make an informed investment choice. Investing in any asset has an associated risk.  There is the upkeep which may become a burden.  A property mortgage might become a millstone because of employment changes. Resale of the asset may be disappointing.

Fractional Ownership reduces all these risks.  The shared risk means you are less financially stretched.  Using a properly prepared Fractional Ownership scheme has a lower risk and is a more efficient use of capital than outright purchase.

Fractional Ownership is not Timeshare
Do not confuse the model of Fractional Ownership or Shared Ownership with Timeshare.  The Fractional method provides outright ownership with protected deeds and title insurance.  Timeshare is acquisition of a membership linked to a limited period of time.  The developer keeps the full asset ownership. Resale is often difficult. Unlike Fractional Ownership there is no capital growth only capital cost.  Although both need a management fee, the Fractional investment has a much lower managing charge.  Depending on the asset, it also increases in value and the Fractional investor shares in this growth.
Fractional Ownership, sometimes known as Shared Ownership, is now regarded as the best way to own a second (or third) holiday property.  As the quality of the products has improved so the opportunities for Fractional Ownership have increased.  This growing industry of Shared Ownership, is now spreading into other products such as private jets, luxury sports and performance cars and even expensive designer handbags.  Fractional Fashion has arrived.  Fractional Fashion Clubs provide the opportunity to live like a millionaire but with a restricted budget.  Fashion is fast-moving and this method provides individuals the resource of the latest designer handbags.

Your choice of investment format
The investment can be in various formats -  the choice is yours.  There are two fundamental mechanisms for sharing all assets
•   Joint ownership by all the parties
•   One party owns the asset and others pay for a license of occupation or use.

There are different methods to enable fractional ownership
•   Joint ownership by more than one individual
•   Company formation for  ownership and assignment of shares proportionally
•   Sharers form a Partnership for the asset ownership

In all these methods the sharers do not have to own equal shares of the asset.  For property it may be share certificates in a property owning company.  More commonly the property investor takes a share in a deeded title.  This provides not just security but the benefits of asset growth.

Who benefits?
                        
The credit crisis has hampered many companies and wealthy individuals in purchasing luxury items.  Groups formed by family members, friends and investors all join forces to buy the item.  It is a stress free ownership scheme.  And with no capital gains tax payable on the investment, large or small investors find it attractive.

Remember - Fractional ownership turns dreamers into owners.  Still dreaming?  Now is the time to act.  Further info: mike@andwords.com.

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