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More ‘F’ Words: Selling the Idea of Fractional (or Shared) Ownership
July 29, 2010Article by Ray Withers
The discussion of the ‘F’ word – Fractional Ownership – continues. Companies dedicated to the fractional process report that the word has no negative connotations for their clients, who are already familiar with the concept. Fractional ownership exists at many different levels – paintings, cars, wines, club memberships, etc. … Perhaps there will be fractional relationships, fractional marriages and fractional dating agencies soon: the idea is not completely far-fetched and don’t forget that you heard it here first! An in this context, it certainly sounds better than ‘shared’!
On a more serious note, the fractional – or shared – model can be seen as a form of ownership for our time. It opens up markets and products (as in the case of Bacolet Bay’s ‘affordable luxury’). It allows investors to diversify and spread their portfolios. It democratises ownership.
That said, a fractional/shared investment usually assumes a long-term commitment and, as in any form of sharing, the needs of others must be taken into account. Often, exit strategies need to be worked out by consensus rather than determined by immediate individual wish. This could be said to entail a loss of independence. But it also confers a secure ownership structure and – as with the now more familiar ’share of freehold’ – spreads responsibility.
For Property Frontiers, fractional/shared products are a new concept, both for us and our clients. There is therefore ‘the shock of the new’ – more of a problem on this side of the Atlantic than the US. This is combibned with healthy scepticism about an unfamiliar product. Yet this pattern of ownership is the way forward for many investors. It can offer a form of liberation from the ‘age of austerity’.
It will be interesting to see the concept gather momentum, whatever word we use to describe it.
Written by: Aidan Rankin