What Is Fractional Ownership And How To Recover Lost Money?

Photo of author
Written By Juliet D'cruz

Fractional ownership has been around for a while, it has only started gaining popularity in real estate in recent years. This has, unfortunately, lead to a lot of poor deals offered to a lot of people, after which they’ve realized they’ve lost their money. Understanding how losing money is possible here and what to do so as to recover that money requires you to first understand precisely what fractional ownership is, further explained here.

What Is Fractional Ownership?

Put simply, fractional ownership is an investment type in which the actual cost of an asset is split among numerous shareholders. Numerous unrelated parties can share ownership over a specific asset, while also sharing the income it can make, as well as the usage rights. It is basically when you buy, say, a share of a specific resort and get the right to visit it free of charge at a certain period during the year, or to get income from renting it out.

It all sounds quite good on paper, doesn’t it? Not having enough money to buy an entire property could lead you to making this type of an investment, after which you’ll feel as if you’ve done something meaningful with your money, instead of just letting it sit or wasting it on something useless. While all of this does sound amazing and it could sometimes be a good move for some people, there are a lot of pitfalls to beware of.

What Are Its Pitfalls?

First off, securing a mortgage on a fractional ownership is impossible, meaning you’ll need to pay in cash. Plus, the leases are often long-term, usually anywhere between 50 and 99 years, so getting out of it once you’re in is also practically impossible. Selling a part of a property is, furthermore, much more difficult than selling an entire one, which basically means your money could get stuck in a particular resort, without getting much benefits, and without you being able to get it back.

Consider both the benefits and the drawbacks here: https://www.bankrate.com/investing/fractional-real-estate-investing/ 

Click here – 6 Tips on How Travel Rich Without Breaking The Bank

Having your money stuck in an asset like that is not exactly a dream come true for any real estate investor. The expectation that you can spend a particular period of time in the resort you’ve invested in this way, though, can make the offers more appealing. Yet, it’s not all roses and rainbows there either and here’s why.

First off, most resorts usually have certain additional regulations that allow them to relocate you when you visit, instead of letting you stay at the same property every single time. On top of that, the time frame during which you’ll get to visit could be unsuitable for you. Thus, you could wind up placing your money into a specific resort, such as The Resort Group or a similar place, without ever actually getting any benefits from it, either through your own visitations or through rental income.

On top of all that, some resorts use a lot of strategies to attract investors, such as claiming that certain celebrities have visited the place, so as to boost their credibility. In reality, you could easily wind up getting scammed, so to speak, into giving your money away without ever getting anything in return. And, since you’ll commit to a long period of time, as explained above, you won’t be able to recover the lost money that easily.

Click here – The Importance of Choosing the Right Chicken Coop Wire

How To Recover Lost Money?

While recovering the lost money isn’t easy, it is, fortunately for you, still possible. If you’ve invested in The Resort Group or a similar place that has the same scheme and that’s bringing nothing to the table for you, there’s no doubt you’ll want to do everything in your power to get out of it and recover your money. Doing so is possible, but only if you hire great solicitors to fight for you.

Hiring those that have experience in these types of cases is a must. And, so is hiring highly reputable solicitors that have a track record of winning similar cases. Naturally, working with those that offer the “no win, no fee” option is an additional advantage. So, take time to find great solicitors if you’ve made such an investment, and let them fight for recovering your money, as you certainly won’t be able to do it alone.