Fractional Ownership

AAA

DEFINITION of 'Fractional Ownership'

Percentage ownership in an asset. Fractional ownership shares in the asset are sold to individual shareholders who share the benefits of the asset such as usage rights, income sharing, priority access and/or reduced rates. The usage benefits that the fractional owners receive are similar to those of timeshare owners.

BREAKING DOWN 'Fractional Ownership'

Fractional ownership is a common investment structure for expensive assets such as aircraft, sports cars and vacation properties. The fundamental difference between fractional ownership and timeshare is that, with fractional ownership, the investor owns part of the title, rather than units of time; with fractional ownership, if the asset increases in value, so does the value of the shares in the investment.

RELATED TERMS
  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Transumerism

    A consumer trend toward renting or leasing items rather than ...
  3. Tenement

    A housing structure that has several houses or units put together, ...
  4. Lease To Own

    An arrangement where an individual enters into a lease agreement ...
  5. Rent To Own

    An arrangement between a consumer and a seller that allows the ...
  6. Income Property

    Property bought or developed to earn income through renting, ...
Related Articles
  1. Home & Auto

    How To Analyze Real Estate Investment Trusts

    REITs are much like dividend-paying companies, but analyzing them requires consideration of the accounting treatment of property.
  2. Options & Futures

    Timeshares: Dream Vacation Or Money Pit?

    This popular real estate product has its advantages, but don't expect to make a profit.
  3. Home & Auto

    Après Ski to Profit: Investing in a Swiss Chalet

    Evolving Swiss property laws mean that Swiss ski chalets have become precious commodities – and excellent investments, even if you're not British royalty.
  4. Home & Auto

    Strategies To Buy The Perfect Vacation Home

    Ask yourself these six questions to make the right decision about a vacation property.
  5. Personal Finance

    5 Best Beach Towns To Buy Property In

    These locales offer vacation homeowners scenic views and plenty of amenities. The home prices can't be beat either.
  6. Investing News

    This Company Is No Mickey Mouse Operation

    With its famous history that's become part of popular culture, and the instantly recognizable silhouette in its logo, The Walt Disney Co. is only an animation studio in the same way that Johnson ...
  7. Retirement

    Peri-Retirement: The New Life Transition

    Use your 30s and 40s to imagine new life options – and try them on for size
  8. Entrepreneurship

    6 Wealthy People Who Owned Private Islands

    Larry Ellison and Richard Branson are just two of the people who bought their own private islands.
  9. Home & Auto

    Tax Rules For Renting Out Your Vacation Home

    Here's a rundown of the specific tax rules that apply to homeowners renting out a vacation property.
  10. Home & Auto

    Best Places In The U.S. To Buy A Summer Home

    Here are the best spots in America to buy a summer home, based on price, exclusivity and other enticing features.

You May Also Like

Hot Definitions
  1. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  2. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  3. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  4. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  5. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  6. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!