What are the disadvantages of fractional ownership?

Property buyers should carefully consider fractional ownership before signing on the dotted line. Fractional ownership is ideally suited for holiday-type or short-term accommodation properties. Banks look very carefully at the type of legal entity and structure behind the fractional ownership, and getting a bond can be difficult.

Here are some of the common disadvantages of fractional ownership:

•Limited Usage: Co-owners' access to the property is restricted to their allocated time, potentially causing scheduling conflicts.

•Illiquidity: Fractional ownership is not as liquid as traditional real estate investments, as selling individual shares may require time and effort.

•Management Disputes: Disagreements among co-owners can arise, particularly concerning property management decisions.

•Market Risks: Fractional ownership is still influenced by the real estate market's fluctuations, affecting the property's overall value and rental income.