What is Fractional Ownership?
The traditional concept of ownership has led way to new, redefined models of owning assets. The strong development of a sharing economy, and the need for flexibility to pay for what we really need make fractional ownership seem like a very sensible option.
Ownership has existed since the beginning of humankind. Ever since the first group of humans set foot on Earth, they felt in possession of homes, food, pets, fire, you name it. It’s just a basic instinct. With time, homes became one of the most important assets: they provided safety and a sense of attainment.
In recent years, the old concept of ownership has evolved into new models, one of them being fractional ownership. Also known as co-owning or shared ownership, it offers a more flexible alternative to having and enjoying assets, especially those that are not essential, but can provide a better quality of life and make us feel more fulfilled. Let us talk to you about how the concept of ownership has evolved, how the economy of sharing has influenced it, the basic idea about fractional ownership and what alternatives fractional home ownership offers to people who really want to buy a second home, but don’t consider the purchase to be a cost-effective option yet.
The long-standing idea of possession
Besides our long history of possession, the sense of ownership has been evolving through generations. Our parents bought homes and landed jobs thinking it would last forever. It topped their sense of accomplishment. But the world we live in is not the same anymore. We are not so worried about full ownership anymore.
We are more aware now that resources cannot last forever, so we need to live with the idea of using just what we need. Or we hope to have learned that along the way. For those of us who think about sustainability as well as profitability, the idea of owning just that part we need of something instead of the full asset is a very appealing idea. That’s when the concept of fractional ownership really kicks in.
Our lifestyle has become more nomadic through decades, which means our sense of possession and attainment is a lot less rooted and more versatile than for previous generations. Many of us aspire to own whatever makes us happy at a particular moment in life, but knowing the feeling or need will not last forever. A home is, for many people nowadays, a vehicle that facilitates the lifestyle you are seeking at a particular moment in time. By no means it becomes a limitation or anchor to a place or a way of living from which we won’t be able to come out. Property is just a means, not the ultimate goal.
Fractional ownership goes along those lines. It helps people detach themselves from the old sense of possession and aids in perceiving the sense of ownership as a way of facilitating the flexibility we need, while providing the lifestyle we look for.
But what exactly is fractional ownership? Let’s find out.
Get the basics of fractional ownership
The concept of fractional ownership is simple: you take an asset, let’s say a home, divide it in different parts, and sell them individually to a group of people. Usually this is done through a previously established LLC, which makes it a lot tidier. In order to keep things within a certain order, you set some basic rules for ownership: the amount of use, some common fund for costs, the upkeep of the asset, and any other benefits or obligations that come with it.
Other types of fractional ownership extend to a full list of luxury assets like art, yachts, or expensive cars. It allows for buyers to expand their patrimony while diversifying it, minimizing risks and maintenance costs. Basically, it is a different mentality on owning things, essentially based on making it smart and cost-effective.
Fractional ownership is often confused with timeshares. The latter became popular in the 80s and 90s in the U.S. However, after its initial craze, popularity came down. What you owned was never meant to be the property itself, but the time you could spend in somebody else’s place (usually owned by resorts or big travel groups). And of course, without a real sense or ownership, selling becomes very challenging. And it did.
The economy of sharing
Have you ever been an emotional buyer? Let me explain: have you ever felt down, or stressed and have run to your favorite shop to do a shopping spree, only to find out the initial happiness was actually just temporary? Spending money and the feeling of having things does not really cut it beyond some basics.
Resources are becoming more limited, and some parts of the world are getting too crowded or exploited. For God’s sake, even the Himalayan mountains have become too packed.
Excessively having things for the sake or feeling accomplished has led to a more conscious way of owning, and a different consuming economy. The voice in our head that often went “I want it”, now says “do I really need it?”.
According to Forbes, fractional ownership is a lagging factor for the development of a sharing economy and worth keeping an eye for.
The difficult coronavirus pandemic has helped develop other human instincts, like sharing, or living a simpler, more fulfilling life. We realized we don’t need so many things to be happy. At least not those that money can buy.
We also have become financially wiser, and in the search for simplicity, many of us have realized we want to avoid big financial burdens. We prefer to own less, but use it fully, without paying full price for it.
Fractional ownership for second homes
When it comes to vacation homes, fractional home ownership makes even more sense. Why would you fully own a place, pay all its maintenance costs and repairs, and deal with financing it, when you know you will use it just a few weeks a year?
At Vivla, buying a home means being the happy owner of a spectacular getaway spot in some amazing European destinations. You can own a minimum of ⅛ of a property and enjoy 6 weeks of vacation a year.
Vivla also manages all the details of the purchase and selling process and handles all aspects of the home maintenance and upkeep. You pay a fair monthly fee for all of Vivla’s managing work and also get nice services like storage and setting up of your personal belongings, nice home features and technology and great amenities.
If you think owning in a smart and flexible way is a sound option for you, let’s start a conversation about our ownership model, its benefits, and how you can improve your quality of living. Apply to Vivla or talk to an expert. In the meantime, feel free to visit our site or read our FAQs.