Puerto Vallarta Real Estate

Beyond Traditional Ownership: Discovering the Superiority of Owning Fractional Real Estate

Craig Hogan | June 21, 2023

The Rise of Fractional Ownership: The Latest Inflation-Beating Strategy in Real Estate

The concept of shared ownership is both elegant and intuitive, making one wonder why it took so long for these arrangements to gain the attention and popularity they truly deserve. Why bear the full costs of owning something that will only be utilized part of the time?

Why not distribute the expenses among like-minded individuals who share the same desires? This straightforward logic is now being embraced by buyers across various luxury sectors, ranging from executive jets to magnificent yachts. However, the most prevalent application of fractional ownership today is in the realm of vacation homes.

Statistics reveal that the majority of people only spend a mere 17-30 days per year at their vacation properties. Fractional ownership has gained appeal by enabling individuals to own solely the portion of a vacation home that they will utilize, rather than bearing the burden of an entire property. The primary benefits of fractional ownership are as follows:
  • Lower Acquisition Costs:

By purchasing a fraction of a property, buyers only pay a fraction of the total cost. Additionally, the expenses associated with renovations, furnishings, and outfitting the property are shared. Although the per-share cost of fractionals, which are typically packaged by property owners or developers, includes a markup (with the total share price averaging 150-250% of the home's cost and contents), they remain an attractive option for most buyers. Fractional ownership spares them the time, effort, and complexity involved in outfitting a property, establishing legal structures, and assembling a group of owners

  • Lower Operating Costs:

Owning real estate entails ongoing operating expenses such as property taxes, insurance, utilities, and maintenance, including repairs and replacements of furniture and other household items. Managing a vacation home can be particularly challenging due to sporadic usage and the distance between the owner and the property, often necessitating the assistance of a local manager or management company. Sharing the costs and efforts of operation significantly alleviates these burdens.

  • The Advantages of Renting Out Your Vacation Property:

Renting out your vacation property can be a strategic move that unlocks numerous advantages and maximizes the value of your investment. By opting to rent out your vacation home when it is not in use, you can generate a steady stream of income that helps offset the costs of ownership. This additional revenue can contribute to covering expenses such as property taxes, maintenance, insurance, and even mortgage payments. Moreover, engaging in vacation rentals allows you to leverage the property's potential and make the most of its idle periods, transforming it into a lucrative asset.

Beyond the financial benefits, renting out your vacation property provides the opportunity to share the beauty and allure of your destination with others. By becoming a host, you can offer travelers a unique and memorable experience, creating lasting memories for them while generating positive reviews and building a solid reputation as a trusted vacation rental owner. This can lead to repeat bookings, word-of-mouth recommendations, and an expanding network of satisfied guests. Additionally, renting out your vacation property enables you to retain flexibility in terms of personal usage. You can choose to block off specific dates or seasons for your own enjoyment, ensuring that you still have ample time to relax and unwind in the comfort of your own vacation home. By striking a balance between rental income and personal usage, you can fully optimize the value of your property without sacrificing your own vacation experiences.

  • Diversification of Investment and Destinations:

Shared ownership enables individuals to spread their investment capital across two or three vacation homes, instead of being tied to a single property. Diversifying funds among multiple homes reduces investment risks and increases the likelihood of profitability by exposing owners to different real estate markets. Moreover, owning vacation homes in various locations provides more vacation options each year while allowing owners to spend time in familiar surroundings where they know how everything works.

The benefits of fractional ownership are so compelling that many individuals who could comfortably afford their own vacation homes are opting for fractional ownership instead. Surprisingly, even existing vacation homeowners are choosing to sell fractional interests in their properties to alleviate financial and management burdens, while still enjoying the property as frequently as before.

Present-day fractional ownership arrangements are often organized by the owners themselves, although property owners or developers increasingly structure and package these opportunities. They outfit the properties, establish legal frameworks and documentation, and subsequently offer fractional interests for sale. Contrary to common assumptions, groups of strangers who come together through these packaged offerings tend to be more successful at managing the shared property than groups of friends or family members. The key to success lies in sound advice, meticulous planning, and comprehensive legal agreements.

Affordable fractional ownership has finally come to Puerto Vallarta. Beachfront fractions are available for as low as $20,000 USD. You do not need to have citizenship in Mexico to own property.

Check out our One Beach Street FAQ here:

One Beach Street is currently offering tours of the property and a no-pressure, no-hassle info session. Call us today to get your session set up! You can own beachfront property in Mexico. Let us show you how. Contact us at [email protected] or [email protected] or WhatsApp +1-773-742-5929 

Interested in learning more about the best opportunities on Mexico's Pacific Coast? Check out our new Puerto Vallarta Luxury Real Estate Guide 



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