Fractional Ownership South Africa – Segmentation of the Vacation Ownership Market
Do you understand the difference between Classic fractions, High End Fractions and Private Residence Clubs?
Don’t fret, most people don’t!
On a recent survey conducted in South Africa, it appeared that although the South African vacation investment community is just beginning to understand the differences between timeshare and classic fractions. There is still a large portion of investors that still needs to be educated on the other various co-ownership and usage vehicles available in the market, particularly around high end fractions and Private Residence Clubs (PRC’s).
As you read this there are some truly fantastic products available in the market coming from all 3 stables of vacation ownership. There are opportunities that suit not only your pocket, but usage requirements too, whatever the level of luxury you seek.
Here is the quick guide to the three fractional ownership and usage structures:
Classic Fractional Ownership
The property of Classic Fractional Ownership is shared ownership and exclusive usage of luxury holiday property in high demand estates and areas. Fundamentally you purchase a share in a company that owns and manages the property (the asset) like a luxury hotel or guest house.
Your share value is directly linked to the value of the actual property, so you are likely to see capital appreciation on your investment, as well as the FREE holiday time allocated to you forever through the usage roster.
Unlike timeshare where you only own the use of time in a property or exchange program, Classic and High End fractions offer you shared ownership underpinned by the value of the property plus adequate usage. And in many cases an exchange program benefits and income generating rental programs are included in the purchase price.
Private Residence Clubs
With Private Residence Clubs you’re offered a membership purchase into a resort environment, usually five or six stars, which is likely to include concierge services, exclusive access in a luxury boat, plane or helicopter, as well as access to the various amenities of the resort. Exchange with similar resorts around the world is typically included in your purchase.
PRC’s main motive is purchasing into a five star lifestyle, followed by the secondary reason being that of an investment opportunity.
High End Fractions
Although close to classic fractions, High End Fractions offers a slightly enhanced structure. With High End Fractions you purchase into one or a portfolio of properties, allocated yet flexible usage with added luxury hospitality services such as on-line reservations, private concierge as well as inter-portfolio and international exchange.
Upon review of the various structures, most of the companies promoting fractions and PRC’s all have one thing in common: “You are only purchasing the time you require in one or more luxury properties. The price tag is determined by the flexibility of use as well as the additional hospitality services allocated to your share and the usage experience.”
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