Fractional Ownership

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. Fractional Share

    A share of equity that is less than one full share. Fractional ...
  2. Timeshare

    An ownership model whereby many customers own allotments of usage ...
  3. Time Sharing

    A hybrid form of ownership. A time share is the right to occupy ...
  4. Fractional Reserve Banking

    A banking system in which only a fraction of bank deposits are ...
  5. Incidents Of Ownership

    Any interests or rights that an individual maintains in an asset, ...
  6. Absolute Interest

    Total and complete ownership of an asset or property. An individual ...
Related Articles
  1. Personal Wealth & Private Banking

    You Can Share a Helicopter: Here’s How

    It's called fractional ownership, and if you often fly in helicopters, it could be well worth the investment.
  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. Retirement

    Find an Affordable Timeshare on a Retiree's Budget

    Vacations can be expensive, especially on a fixed income. These tips will help you buy a share in a getaway property that's not too pricey.
  4. Personal Finance

    Timeshares: New vs. Resale

    Timeshares can be bought in the secondary market. But would-be owners need to know about the pros and cons of new vs. resale.
  5. Investing News

    How Exactly Does Fractional Jet Ownership Work?

    An overview of what fractional jet ownership is and how it works.
  6. Home & Auto

    Top 7 Reasons to Not Buy a Timeshare

    Learn the seven most important reasons why a timeshare makes a lousy investment. Understand why you shouldn't consider buying a timeshare as an investment.
  7. Retirement

    6 Unique Timeshare Ideas for Rich Retirees

    When it comes to timesharing, there’s no limit on quirky or wild venues, as vacationers buy shares in castles and tree houses, yachts and train cars.
  8. Retirement

    5 Great Timeshare Locales for Retirees on a Budget

    For retirees on a budget, there are affordable timeshares located in charming towns that don't cost a fortune for vacation time.
  9. Retirement

    Retired & Rich? The 5 Most Luxe Timeshares

    Timeshares have gone seriously upscale. No longer mid-range vacation places, here are some very deluxe locations for retirees.
  10. Investing Basics

    Defining The 3 Types Of Investments

    An investment is something that is purchased with the expectation it will produce income or a profit. There are three main types: ownership, lending, and cash equivalents
RELATED FAQS
  1. What are the components of a financial account?

    Understand what the financial account is and how it relates to a country's balance of payments. Learn about the components ... Read Answer >>
  2. What is the difference between a financial account and a capital account?

    Understand the components of a country's balance of payments. Learn about the difference between a country's financial account ... Read Answer >>
  3. What are the types of share capital?

    Understand the characteristics of common stock and preferred stock, the two ways by which companies obtain share capital ... Read Answer >>
  4. What are some advantages of ordinary shares?

    Learn about the many advantages of investing in ordinary shares, such as dividends and ownership rights, as well as the benefits ... Read Answer >>
  5. Can anyone own common stock in a company?

    Understand who can purchase common stock as well as the key characteristics that differentiate common stock from preferred ... Read Answer >>
  6. Why would a company buyback its own shares?

    Learn about share buybacks and some of the many reasons a company may choose to repurchase its own stock, including ownership ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center