Often confused with timeshare, which is best described as a prepaid vacation, fractional ownership is just that – ownership. It is a deeded property with the same rights as any other real estate purchase. You can sell, rent or give your fraction to a friend or family member.

Fractional ownership is the hottest trend in luxury real estate because it is so attractive to an upscale segment of the population who insist on a high level of luxury and service. More than half of fractional owners have owned a second home previously, but are moving to fractional because for them it is a better value, offering less hassle and far more enjoyment.

Fractional ownership is often described as "luxury without the hassle" or a "second home without a second job." Each owner is deeded a fractional real estate interest of a specific condominium residence as well as interest in the club facilities and common areas. The owner pays monthly or annual maintenance and association costs, plus annual real estate taxes based on ownership. All the other related concerns of vacation home ownership or second home ownership, including maintenance and furnishing replacements, are left to a property management company governed by a board of owners.

Luxury fractional resort properties are typically located in world-renowned resort locations where prime real estate is in extremely short supply. Fractional owners enjoy, on average, anywhere from four to 13 weeks per year in the property.

One of the key benefits of fractional ownership is the level of service and amenities that accompany your purchase. Fractional ownership is more than a home – it is a lifestyle, best enjoyed by those who make acquiring new experiences a top priority. A typical fractional buyer is one who takes advantage of all that a vacation area offers – from shopping in the most upscale boutiques to deep-sea fishing charters, pampering spa treatments, world-class golf and fine dining. For those who choose a fractional ownership option, having a second home has never been more enjoyable or hassle-free.

A fractional ownership is all about service. Whether it’s parking your car, stocking your refrigerator or arranging reservations for a romantic dinner, the resort concierge does it all. The moment you arrive, your vacation begins. Simply put, the fractional lifestyle is one that is unmatched by a traditional second home purchase or timeshare.

According to the latest study by Ragatz Associates, a resort industry research firm, fractional sales continue to accelerate at an impressive pace. There are now 170 resorts in active fractional sales worldwide, compared with just 158 in 2004. Fractional interest sales totaled approximately $1,075 million worldwide during 2004. In addition, $31.5 million of resales and $436.7 million of presales were generated in 2004 for a grand total of over $1.5 billion. The average price of a fractional interest was $221,600 in 2004, up from an average of $207,800 in 2003. Fractional resale values were consistently higher than those of timeshares.

Fractional owners are much more satisfied than timeshare owners, according to the Ragatz study. The vast majority (85%) of owners report being satisfied with their fractional interest. In addition, more than 9 out of 10 owners either already have recommended fractional ownership to a friend or relative, or are willing to do so.

The top reasons for purchasing are: 1) the advantages of owning a second home, without the disadvantage of high costs associated with whole ownership; 2) lifestyle investment or equity appreciation; and 3) the fact that the concept seems like a good value.

With the increasing sophistication of second home buyers, the number of resorts engaged in fractional sales is certain to increase in the immediate future.