Fractional Ownership

By the team at esperanza real estate

What does it really mean?  Literally translated, fractional is defined as 
‘comprising a part or parts of a unit’ and ownership is defined by ‘legal
​right of possession’.

A common misconception is that fractional ownership is the same as timeshare, which is a concept by which multiple parties bought the right of use for the same unit or villa within a resort property setting.  Los Cabos has only a few fractional ownership properties and a large number of timeshare properties.

In Mexico the difference between timeshare and fractional ownership is right-of-use for a certain time period, versus ownership via a deed, or via a fideicomiso (vehicle of legally deeded ownership in Mexico).  There are many wonderful timeshare resorts in Cabo, and many vacationers are offered an opportunity whereby they must sign and pay the same day to get that great deal, and as a result receive a contract/receipt for a right-to-use property at a given resort. The right-to-use option is for a set period of time, which will someday expire with no equity and no ownership to resell.

On the other hand, if deeded ownership with the potential of earning equity is a prerequisite to your investing in a vacation villa, the distinction of buying timeshare versus fractional ownership is critical.  True fractional ownership is a real estate purchase that can carry title insurance and typically take 60 days to close and at the end of the escrowed process you will have a fideicomiso to someday resell in a transfer of rights to another buyer or opt to pass on to your chosen beneficiaries.

The fractional ownership concept makes a lot of sense for many people because it provides all the benefits of owning a beachfront vacation home of the highest quality, with zero hassles.  Actually, the headaches of second-home ownership are replaced with services and amenities provided by these fine resorts.

For example, Esperanza owners may enjoy deeded fractions in two, four, six or eight week increments.  These weeks may also be used by their family, friends and perhaps valued employees, or donated for charitable purposes.  Owners may release their weeks back to the resort to rent, and like many fractional residence properties, owners also may enjoy trading their weeks to other resorts within a specific similar collection of properties.

As an example, for as little as $100,000 Esperanza owners may trade with similar, like-minded Clubs in their portfolio such as, Italy, various resorts in Colorado, Napa Valley, Hawaii, Florida, Oregon and more. They may also enjoy Esperanza’s amenities at no extra charge; such activities include: yoga; SUP yoga; pilates; spin; TRX; and Zumba classes.  Tennis and mountain bikes are also free for the asking.  Owners may enjoy a complimentary cooking class with the Esperanza executive chef.  And, at the end of the week, you can simply leave your personal things behind in your Esperanza storage, which will be waiting for you upon your next visit. 

Other fractional properties in Los Cabos include Villas de la Estancia, Esperanza and the Westin.  Ask your MLS BCS ales agent to show you these options.

In practicality, and as is the case with Esperanza Resort, it is created for those looking for an intimate and exclusive resort experience with an inspiring beachfront location at a fraction of the price of a multi million dollar beachfront home.
 
Again, timeshare has its advantages for a large percentage of the population, and happy vacationers at such resorts are abundant.  However, if deeded ownership and real equity is a must, ask your agent or salesperson if the property they represent or are selling, offers individual fideicomisos and/or if purchasing title insurance is an option.  Therein lies the crux of the long-lived debate of fractional ownership versus timeshare.  

 Happy house hunting!

Editorial from the Esperanza Real Estate Company, www.esperanzarealestate.com, intl:  877.615.7187, local:  145.8080