FrontDoor.com

A second home has been called the ultimate discretionary purchase - something that many people would like to have but no one needs. People who own a place at the beach, the lake or in the mountains often are quick to express frustration at not being able to spend more time there. It hardly makes sense to have the expense of a mortgage, upkeep, insurance and taxes for a place you don't use more than a couple of weeks a year.

That's why more and more family members and friends are joining forces to buy a vacation home. It cuts down on the cost, and everyone gets to enjoy a place that's more than just a hotel room. In 1994, a new concept debuted in the United States - fractional ownership of vacation homes. Patterned after fractional ownership of private jets, the concept formalizes the idea of a group of relatives or buddies pooling their resources to buy dream getaways - chalets with walkout skiing in the Rockies, oceanfront houses or condos, or island properties in the Caribbean and Europe, often with resort-style amenities including on-site restaurants, fitness clubs, golf courses and a concierge service.

How It Works

Ownership is usually divided into fourths, eighths, 13ths, whatever, with each owner having an equal number of days a year to use the unit. Owners buy their shares from a management company, which handles maintenance and scheduling everyone's time.The more fractions sold in a fractional ownership property, the more it resembles a timeshare. Both can be bought as deeded properties (some time shares are now sold as club memberships instead of time in a specific unit), and can be rented out, shared with family and friends, sold or left to someone in a will.