Introduction
Timeshares and fractional ownership have gained significant momentum over the past decade, especially in the UAE’s real estate market. The rising demand for timeshares and fractional ownership is primarily due to the fact that they provide the advantages of owning a property without the full financial burden.
Let us now dive into the meaning and differences between timeshares and fractional ownership.
What is Timeshare?
A timeshare is primarily an ownership arrangement where individuals purchase the right to use a property for a specific amount of time each year, making it a time-based ownership, as the name suggests.
A timeshare property is generally situated in a hotel or resort and is rented out to visitors during peak periods.
What is Fractional Ownership?
Fractional ownership is a method for investors to invest in small portions of different types of properties, like commercial, residential, luxurious, etc. Fractional ownership in the UAE particularly revolves around high-end residential properties, which generally may be out of reach for a wider audience.
By enabling multiple people to invest in a property, like crowdfunding, investors can reap benefits like capital appreciation and rental income without the full financial burden.
Key Differences Between Timeshare and Fractional Ownership
Ownership Structure
Timeshare
Timeshare owners own the right to use the property for a specific time frame each year, which means ownership is fundamentally time-based. With a timeshare, ownership is mostly acquired on a rotational basis, implying when each owner can use the property so that all owners get a fair distribution of prime as well as off-peak periods of the property throughout the year.
Fractional Ownership
Fractional ownership involves shared ownership of a property, giving investors an opportunity to acquire fractions of a property and offering them a more tangible and longer investment.
Unlike timeshares, fractional ownership in the UAE generally does not permit investors to use the property. Instead, the property is rented out for either short or long term, depending on the location and its historical performance. The rental income is then distributed to the investors as per their share of ownership.
Property Type
Timeshare
Since timeshare is a property ownership model that allows investors to purchase a property for a specific period each year, timeshare properties in the UAE are often part of resorts, vacation homes, and hotel suites.
Fractional Ownership
Fractional ownership in the UAE is currently restricted to residential properties as per the regulations of the Dubai Financial Services Authority (DFSA). However, it gives a broader range of options for investors to choose from as the properties can be apartments, villas, and even penthouses.
Target Market
Timeshare
Timeshare tends to attract investors from middle-class families, retirees, and individuals that are looking for cost-effective vacation options for a specific time frame.
Fractional Ownership
Fractional ownership typically attracts investors who wish to enjoy the benefits of real estate investments like capital appreciation and rental income without taking on the hassles like paperwork, maintenance, and a hefty down payment.
كيف يمكن لشركة بريبكو المساعدة؟
بريبكو بلوكس: is a platform enabling fractional ownership of the UAE’s best rental properties from only AED 2,000 (approx. USD 540). Investors can expect a net annual return of 8-12% which comprises of monthly rental income and capital appreciation.
Conclusion
Timeshare and fractional ownership are both quite popular choices in the UAE, particularly for individuals seeking vacation properties or luxury assets in the country. Timeshare offers limited usage and focuses on shared vacation opportunities; fractional ownership, on the other hand, provides the potential for high returns for properties in the UAE.
