What Is Fractional Ownership?

Fractional ownership is a 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 reduced rates. The usage benefits that the fractional owners receive are comparable to those of timeshare owners.

KEY TAKEAWAYS

• Fractional ownership is an investment approach in which the cost of an asset is split between individual shareholders.
• All the shareholders split the benefits of the asset, such as income sharing, reduced rates, and usage rights.
• This type of investment split is common in the purchase of expensive assets, such as vacation homes, luxury cars, and aircraft.

Fractional Ownership Explained

Fractional ownership is a common investment structure for expensive assets such as vacation properties such as Vivaan Ek- Parivaar. The fundamental difference between fractional ownership and timeshare ownership 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, the value of the shares in the investment does as well.

Fractional ownership is a form of collaborative consumption where the overall cost of a property is split among a group of owners or users. A party that takes on fractional ownership of a vacation property can make personal use of the space and earn revenue when it is rented out. When the property is rented out for a profit by a fractional owner, it serves as a form of investment property. Fractional ownership in real estate is typically arranged through a property management company that oversees the regular upkeep of the vacation home and restocking of food.

How Fractional Ownership Works with Vivaan-Ek Parivaar :

As for fractional ownership, each property is divided into 8 fractions/shares. Each owner will get equitable distribution in terms of time slot of staying/renting out right in proportion to his or her ownership . Each owner will be given an access to Vivaansmartstays app through which he can manage his stay, gift, swap, rent out or attach his time slot with the hotel. There are interesting options to rent out your apartment. Should you choose to do that in order to put your apartment to use in terms of making money , the app will give you the live details of occupancy and tariff charged by our hotel for your apartment. The revenue so earned by you will be split on 70:30 basis with 70% accruing to you. The app will be synced with our hotel booking engine to give you seamless visibility of your revenue stream. The rental returns in our high-density tourism area are fairly good.

For each fractionally owned property, a SPV will be created and the share of each owner can be traded.