In the US alone, fractional ownership or co-ownership of assets is becoming increasingly popular. Whether you are interested in buying a luxury item, such as an airplane, boat or vacation home, fractional ownership allows you to purchase and share the costs with others. There are a lot of different ways to own property.
You can buy a house, or an apartment, or even a piece of land. But what if you don't want to buy a whole property? What if you only want to own a part of it? This is where fractional ownership comes in.
In this guide, we will discuss the differences between fractional ownership and co-ownership, as well as the pros and cons of each option. We'll also cover what assets you can purchase via fractional ownership or co-ownership.
Read more to learn about the benefits and drawbacks of fractional ownership and co-ownership.
Fractional Ownership: What Is It?
Fractional ownership is a type of asset ownership in which multiple people share the rights. They also share the responsibilities of owning an asset.
Instead of one person buying 100% of the asset, several individuals purchase a fraction of the asset. Thus, they gain proportional access to it.
Fractional ownership allows investors to buy a “slice” in an asset without having to purchase the entire item.
Examples of assets owned fractionally include vacation homes, aircraft, boats, artworks, stocks. The advantages of fractional ownership are many.
This allows individuals to own expensive items they wouldn't normally be able to afford on their own.
It gives shared owners more flexibility when using the property. It also enables individuals to have a larger financial stake in the asset than they would if owning it on their own.
Fractional ownership also has some drawbacks.
Firstly, shared owners are responsible for all costs associated with the asset.
This is including insurance, taxes, and maintenance. Secondly, each owner's rights may be limited depending on the structure of the agreement. For example, one owner may have more access or control over the asset than another.
Thirdly, fractional ownership agreements can often be complicated. They can be difficult to renegotiate when new circumstances arise. Finally, conflicts between co-owners can arise due to differences in opinion or priorities.
Is Co-Ownership Different?
Co-ownership is similar to fractional ownership. Mostly in that multiple people share rights and responsibilities of owning an asset.
However, fractional ownership involves purchasing a “slice” of the asset. So co-ownership usually involves more than two owners who own the entire asset together.
This type of shared ownership has advantages too. It lets individuals access assets they wouldn't otherwise be able to afford.
It allows for greater flexibility when using the property. It gives each owner a larger financial stake in the asset.
The structure of co-ownership largely mirror those of fractional ownership. Shared owners are responsible for all costs associated with the asset. This includes insurance, taxes, and maintenance.
Additionally, each owner's rights are dependant on the co ownership agreement.
Co-ownership agreements protect owners when circumstances arise, especially when a property mangement company is used by the LLC owners like Lifestyle Asset Group.
What Can You Buy via Fractional Ownership / Co-ownership?
There are so many things you can purchase via fractional ownership or co-ownership. Popular items include vacation homes, aircraft, boats, artworks, stocks.
The cost of buying a large asset such as a vacation home can be prohibitive on its own. However, fractional ownership makes it more affordable by splitting costs between several individuals.
If you are looking to buy an asset that is too expensive for one person to purchase outright, try fractional.
Let's take a look at some of the main purchasing categories for fractional ownership.
Fractional Art Ownership
Fractional art ownership is a relatively recent concept. It’s becoming increasingly popular among investors and collectors alike. In fact, it's bound to explode in popularity in upcoming years due to advancements in AI and digitalization.
Fractional art ownership allows those who can’t afford an entire artwork to invest in a portion of the piece. Thus, gaining proportional access to the asset and associated privileges.
The advantages of fractional art ownership are numerous. Firstly, it gives individuals access to expensive pieces of art that would otherwise be out of reach financially.
Secondly, with fractional ownership, each owner gets a larger financial stake in the asset than if owning it on their own. Finally, fractional art owners benefit from additional privileges. For instance, special invitations to gallery openings or private viewings.
There are many fractional art platforms to choose from, our favorites are- https://fractional.art/ & https://www.masterworks.com/
Fractional Jet Ownership
Fractional jet ownership is a great way for people to have access to a private jet. This is without having to shoulder the full financial burden themselves. Part ownership is total ownership, you still have command and a say in what happens and what doesn't happen.
With fractional jet ownership, several individuals can purchase "shares" in an aircraft. This means that each owner will have certain privileges associated with their share.
Fractional jet ownership has many benefits. For instance, cost savings, access to a larger fleet of aircraft, and tailored flight schedules. By splitting costs between individuals, fractional jet owners can reduce the financial burden.
This allows them to enjoy the many advantages of private aviation at a fraction of the cost. Additionally, having a larger fleet means that owners have more options. This is great for being able to use the jet for your own needs together.
This is true when it comes to choosing the type of aircraft they need for a particular trip. Finally, fractional jet owners can customize their schedule according to their needs.
Here are the most recognized Fractional Jet Companies: NetJets, Flexjet, PlaneSense, Airshare Air Sprint, Nicholas Air, West Coast Aviation Services, Northern Jet Management.
Fractional Diamonds
Fractional diamond ownership is another way to invest in luxury goods. This is without shouldering the full financial burden.
Similar to art and jet ownership, fractional diamond owners divide their investments into small portions. Thus, allowing them to build up a portfolio of diamonds over time.
The advantages of fractional diamond ownership are numerous. It's a great investment that can be easily secured and liability separated from a single individual.
Firstly, individuals who cannot afford to purchase a diamond outright can use fractional ownership to invest in their own diamond portfolio. Secondly, diamonds are a safe and secure store of value, making them an ideal long-term investment.
Finally, fractional diamond owners have access to a range of benefits such as free insurance for their diamonds and the ability to resell their diamonds at a higher price than originally paid.
LUXUS - (https://luxusco.com/) is a great company which allows diamond ownership and regulated as securities with the SEC.
Fractional Property
Fractional property ownership, also known as co-ownership, is quickly becoming a popular way for people to invest in real estate.
Co-ownership allows several individuals or companies to purchase shares in a single piece of real estate, such as a vacation home or luxury apartment. This gives each owner the same rights to use and enjoy the property without having to bear the full financial burden.
There are many advantages to fractional property ownership. First, it lets people who can't afford to buy a whole piece of property get into the market.
Second, when there are multiple owners of one piece of property, each person's financial burden is reduced. This is great for long-term investments.
Thirdly, fractional property owners have more access to a larger number of real estate investments. This allows them to diversify their portfolios better.
Fractional property owners also usually have more flexibility than those who purchase an entire piece of property. They can choose how long they want to own the property for and can even resell their shares if they decide to no longer be involved in the ownership.
Luxury Goods Ownership Made Easy
Fractional ownership is a way for people and companies to invest in luxury goods without having to spend too much money.
People can access a range of assets this way, which they may not be able to afford if they bought them all themselves. Plus, fractional ownership offers cost savings, a larger portfolio and tailored flight schedules.
When you're looking to invest in private jets, diamonds or real estate, fractional ownership can be a great way to go.
Just make sure that you do your research and find an offering that meets your needs and preferences. With the right research and due diligence, fractional ownership can help you grow your investment portfolio.
Get in touch with us now to get started.
