Vacation homes are the most widespread use of the fractional ownership model. After growing in popularity in Europe, the system first spread in the U.S. to ski resorts, and after that to the East and West coasts. Now fractional vacation homes are being developed throughout the country, chiefly in Florida, in golf developments and in other resort areas.

In addition, fractional ownership is offered at destination or residence clubs currently being built and managed by various key players -- Ritz Carlton, Starwood, Four Seasons, Hyatt and others. These corporations administer sizeable resorts in California, Florida, and the East Coast. Residence clubs also exist on a reduced scale, frequently as a portion of a hotel or residential development whose primary purpose is to house short-term guests or to sell residences to individual purchasers.

Despite the variety of structures a fractional ownership vacation home may take -- from luxurious single-family coastal properties to what are essentially 5-star hotels and resorts; from coastal condo developments to residence clubs that are a portion of a larger development -- all together they share many general characteristics.

Most importantly, fractional ownership is not a timeshare. The difference is that a fractional share owner possesses a deeded share for a fraction of the property. On the other hand, the timeshare "owner" is entitled to use his property for specific periods of time; he does not have ownership interest in the property.

An different structure that is used at times for single-family vacation homes is the Fractional Property LLC, in effect a holding company in which each share owner has an equivalent interest.

Whether the fractional share owner possesses a deeded portion of the property or a interest in an LLC, there are a number of benefits. If the property goes up in value, owners' shares also gain in value. Share owners can buy, sell, trade or otherwise convey their fractional share of the property. Share owners, as constituents of the Property Owners' Association, have input into decisions affecting their property. There may be tax benefits to the share owner from deducting mortgage interest or the fractional share of the depreciation on the property.

A number of fractional vacation companies manage properties in several locations around the world. Owners can buy a fractional share in a single property, but are allowed to trade access to their vacation home for use of a property in a different location.

Fractional ownership vacation homes are handled by a property manager who sees to all business affairs, organizes scheduling of owners' visits and may take care of numerous matters to make the owner's arrival uncomplicated and effortless. Owners' personal things may be taken out of their private storage area and placed in the home, ready for their arrival. It is possible to have the refrigerator and/or liquor cabinet supplied with specified items; tee times, tennis lessons, child care, spa appointments and charter fishing can be prearranged.

A fractional share of a vacation home entitles the owner to a specified amount of use of the property. A 1/13 share means the owner enjoys four weeks in the property every year; a 1/6 share allows for eight weeks every year. Some fractional properties have a set calendar, with owners' weeks rotating in the course of the year, resulting in fair sharing of favorite holiday times. Some developments permit owners to trade time amongst themselves; others have clearly defined bidding procedures where an owner may have several fixed weeks per year and a number of floating weeks that are determined year by year.

All the details of the legal and financial structure of the fractional vacation property are clearly laid down in the deed, LLC Operating Agreement, and other management documents. Most fractional properties have a monthly or quarterly fee assessment that covers operating expenses, management, taxes, insurance, maintenance, landscaping, and a fund for replacing furnishings. Yearly accounting of all expenses and budget projections for the forthcoming year are made available to share owners for approval and input.

The growing popularity of fractional ownership vacation homes is explained by the noteworthy benefits they afford -- chiefly, that of having access to a luxury vacation home minus the expense, liability or worries of owning it outright. No repairs, no shopping (unless you want to), no worries. All the owner has to do is show up, unpack the suitcases and - enjoy.

Financing options for fractional vacation homes will be covered in a separate article.

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Simple Tips to Selling Your Home on Your Own - For Sale By Owner
Many property owners every year successfully sell their own real estate and pocket the commission for themselves. Commissions in a real estate transaction can be substantial and may provide a property owner with a sufficient amount of motivation to sell their property themselves without a real ... more...

National For Sale By Owner Companies - They May Not Save You As Much As You Think!
The For Sale By Owner home seller: FSBO (Fizz-Bow). One of the most sought after of all real estate clients. Why? Because their homes are for sale and real estate agents can mail these folks any number of solicitations without stepping on another agent's toes. These are the home sellers that have ... more...

California Law for Real Estate Investors - Including Forclosure Issues
Probate Issues One mistake that California real-estate investors make is signing a purchase contract too soon when a probate is required. Some real-estate investors try to buy properties when the deceased left real estate to family members or friends who cannot make the monthly loan payments. If ... more...

For Sale by Owner Homes - Advantages and Disadvantages
There are two types of real estate deals that you will come across. First off, and most popular, are the homes that are being sold by a real estate agent. Secondly, for sale by owner homes are also becoming more and more popular. There are pros and cons that go along with both ways of selling a ... more...