Fractional Real Estate Investment Or Lifestyle Purchase?

With the current boom in European fractional real estate purchases, one is becoming increasingly wary that some fractional sales organizations are promoting fractional property as a 100% investment purchase. Even more worrying when you consider there’s not an established fractional resale market and we’re still faced with the worst economic crisis since the 1930’s.

The term ‘investment’ is as far away from the fractional purchaser’s motivational psyche than it’s ever been and how many consumers are realistically considering investments of any type in the uncertainty that surrounds us at the moment. In the research that’s been undertaken worldwide it’s proven that the fractional buyer’s main motivation for purchase is based around ‘lifestyle traits’ and all that goes with them – quality time with the family, time saving, enhanced service etc…

You can read about buyer motivations and more in the latest European Trends in Fractional Real Estate 2009 Report.
This 92 page report  www.fractionallife.com/trend_report.asp was commissioned by Fractional Life and undertaken by Northcourse Leisure Real Estate Solutions with the results discussed at April’s fractional property conference in London, “Fractional Summit 2009”- Europe’s largest business to business fractional property event.

With the influx of many pseudo fractional property investment schemes buyers need to be careful of unrealistic and unsubstantiated claims about any future returns in this new market. Be wary of any property investment show which advertises fractional real estate as an investment. Be aware that the market is unregulated and even more cautious if the fractional ‘investment’ is presented by a company whose products are unregulated by the Financial Services Authority (UK) or equivalent worldwide. It’s also worthwhile being aware that despite some recent aggressive marketing by some fractional property operators, a fractional purchase by a United Kingdom national cannot be included as part of a Self Invested Pension Plan (SIPP).
 

True, over the long term property has increased in value but who’s to say this will continue to happen and for how long. As many an expert has said, “timing is everything” and I continue to meet many a poorer UK endowment owner! There will be a better 100% investment in these times. After all a fractional property purchase only gives you a share of any profits in a future sale at best and if this is what you achieve, well done, I’m sure you’d have enjoyed your time and lifestyle immensely and it still would have probably been better than leaving your funds to your bank!

 

Posted:
6/07/09
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