Owning a fractional can pay big dividends – and not just in cash

While the dream of owning a vacation home may sound appealing, the year-round responsibility may turn your dream into a nightmare. Whether it's unexpected costs, the strain of keeping up two properties, the demands of your growing – or shrinking – family or inflexible holiday schedules, research says that most second homes are vacant 85 per cent of the year.

But what if you could share that home – and the costs! – with like-minded people? Maybe throw in a manager to oversee the day-to-day details of ownership. Or go whole hog with an affiliation with a respected hotel group and have access to fine restaurants and upscale facilities? The dark shades fade, and today's fractional ownership is revealed.

But the spectre of time-share scams – which offer incentives to lure prospective buyers into attending high-pressure sales presentations to "own" a week in the sun at "bargain rates" with the "company" often out of business in just a few months –still hovers. When I asked my neighbour to witness my signature on an offer to purchase a fractional cottage, she was horrified. "Please don't!" she begged. "It's shady, and you'll lose your money."

But time-shares have morphed into a more credible and sophisticated investment of fractional ownership with infinite options – from buying a vacation home with friends to private residence resort clubs offered by Ritz-Carlton, Hyatt, Marriott, Four Seasons and Fairmont.

While traditional time-shares typically had 52 owners per unit with each owner offered one week a year, fractionals involve two to 10 owners who visit more frequently, maintaining pride of ownership and strong resale value. At William's Landing in Haliburton, Ont., where my husband and I are co-owners, 18 cottages are scattered over 47 wooded acres with 3,000 feet of shoreline on Lake Kashagawigamog. As 1/10th owners, we enjoy five weeks a year at the lake – one fixed week and one in each of the other seasons.

One of five developments in Ontario by the 16-year-old Chandler Point Corporation, our fractional is equity-based (meaning we own and use shared property) as opposed to non-equity based (where members only use the property). Equity in our property is based on current market value, which is more likely to appreciate than if it were non-equity, and offers more control over the shared property (a 1/10th share is selling for between $60,000 and $70,000 with annual dues of about $2,500).

The annual general meeting has all 180 co-owners voting on proposed budgets, annual fees and the management team. Unlike some fractionals, ours is unit-specific, allowing the co-owners to store personal items in the basement, ready for the next visit. And as deeded owners, we are free to sell without restrictions or pass our share on as an inheritance. As a second residence, we will be subject to capital gains as would a wholly owned cottage.

We also joined RCI (the largest vacation exchange network) so we can exchange any of our weeks for time at one of RCI's 6,300 affiliated resorts around the world.

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