Fractional ownership real estate is a type of investment that allows buyers to share the cost of a property. Instead of purchasing real estate as a sole owner, you pay a percentage of the total property value and split the rest between other buyers. This method of real estate investment is typically used for high-end properties that come with a hefty price tag.

Boat shares are an example of fractional ownership, buyers usually purchase ⅛ of a luxury yacht or sailboat and each buyer gets to use the boat for a specified amount of time throughout the course of the year.

Fractional ownership is essentially a form of collaborative consumption where the total cost of an asset such as a boat or a luxury house is divided between a group of buyers.

What is Fractional Real Estate Investment?

Fractional real estate investment is a cost effective way of purchasing property. Think of it like this, you want to purchase a luxury mansion for £5 million but you don’t have the available funds to purchase the property outright, you don’t want to sign up for a loan or mortgage to purchase the property therefore, you split the cost of the property with seven other buyers. This is fractional real estate investment.

You can do the same thing with yacht ownership, instead of purchasing a superyacht outright as a sole owner, you split the cost between seven other buyers. Meaning that you get to own a piece of luxury without spending more than you can comfortably afford to spend. If you sign up for a fractional yacht ownership deal, you can essentially purchase and own a ˆ£4million yacht for £500,000 instead. A cost effective and more sensible way of owning a slice of luxury.

Is Fractional Ownership the Same as a Timeshare?

Is fractional ownership the same as a timeshare? There is a slight difference between shared yacht ownership and a boat timeshare. With a yacht timeshare, you purchase the right to use the yacht. For example, if you purchased a holiday home timeshare, you purchase the right to use the holiday home for a certain time period in any given year. However, when you sign up for a fractional boat ownership deal, you essentially purchase an actual share of the boat. Therefore,if the cost of the vessel increases, the value of your share would also increase.

Boat syndication gives buyers the opportunity to purchase and own shares in a yacht and each buyer can make use of the boat for a certain designated time in a 12 month period.

How Does Fractional Ownership Real Estate Work?

Fractional ownership real estate divides a property into shares, buyers can purchase a share and own a percentage of the property thus reducing the cost of purchasing the property as a sole owner.

If you wanted to purchase a yacht for example and the overall cost of the yacht was £6 million. You could sign up for a fractional boat ownership deal and purchase a portion of the boat for £700,000 instead. That share belongs to you and you are not just purchasing the right to use the boat like you would do with a yacht timeshare for example.

Typically yacht co-ownership schemes allow each owner to have exclusive access to their boat for approximately six weeks in a 12 month period.

Is Fractional Ownership Worth it?

This is a valid question,especially if you are considering buying a yacht or property with a fractional ownership deal. The answer to the question will depend largely on you, how much are you willing to spend on a yacht? Do you think that it makes financial sense to buy a yacht outright? Or is it more financially viable at this point to join a yacht share network instead?

Purchasing a yacht as a sole owner requires a significant financial outlay. If you have the disposable income to purchase a yacht outright then that sole ownership might be suitable for you. However, if you are searching for a more cost-effective way of owning a luxury vessel, then yacht syndication might be the best option for you.

For example, if you are considering business yacht ownership to entertain your potential and existing clients, you could save a significant amount of money by opting for a boat share syndicate instead.

Purchasing superyacht shares instead of buying a superyacht as an individual owner will reduce the overall cost of buying a yacht and you get to offload the stress and responsibility that is often associated with yacht ownership.

Shared yacht ownership provides buyers with a unique opportunity to own a luxury vessel and experience a slice of opulence without paying for the whole boat upfront as a sole owner. Fractional yacht ownership is cost-effective, convenient and hassle-free.

To answer the question, is fractional ownership worth it? It is worth it if you are interested in buying a yacht or property, but you would rather split the cost of purchasing one with other interested buyers as opposed to shouldering the cost and responsibility of owning a yacht as a sole owner. The money you save could be funneled into multiple investments that could yield significant returns over time. Therefore, purchasing a yacht as a fractional owner instead of sole owner is definitely worth it.

Buying a yacht outright requires a significant upfront investment. With fractional yacht ownership, you get to split the cost and responsibility of yacht ownership with other yacht owners, making yacht ownership more cost-effective, sensible and convenient.

What is Fractional Ownership Real Estate?