Although it is something that is relatively new in the state of New Jersey, a new trend that is occurring within condo and townhouse communities (as well as popular vacation-area resorts) around the country is fractional ownership, where resorts and condo/townhouse communities allow people to live in them part-time.
Don’t get scared off by the name. Fractional ownership is similar to any other real estate purchase, except as the name implies, you will be purchasing just a fraction of the property instead of the whole property.
“It’s an ideal situation for someone because the average second home owner only gets to use their property 1/3 of the time, so it basically sits dormant the other parts. Maybe you could rent it out to pay off some of the expenses, but why own the whole thing when you are only going to use part of it?” says Ian Lazarus of the Landis Company, which represents properties on the Jersey Shore. “Fractional ownership is ideal for the Jersey Shore because it allows people who couldn’t afford an entire property a chance to own these great beach properties.”
Each development will have their own rules about how many fractions they will sell each unit for. The fractional shares can vary from a thirteenth (1/13th) to a half share (1/2). A thirteenth share, for example, provides one week’s use of the property each season for a total of four weeks per year. The quarter shares seem to be more popular and under this unique form of ownership, an owner has a registered title to a one-quarter interest in the condominium, estate or townhouse.
In years past, this was something that was limited to vacation spots in places like Florida, Hawaii and Vermont, as beach and ski vacations seemed like smart targets for this. But in the past few years, more and more locations are considering the fractional option for their properties.