About Fractional Ownership
Fractional Ownership has grown to become increasingly popular in recent years among people looking to enjoy the benefits of luxurious possessions with shared ownership.
What is Fractional Ownership?
The simplest description of Fractional Real Estate Ownership is ‘shared ownership of a deeded property, with usage rights based on time’. The purchasers have a stake in an asset without having to pay for the entire property.
Because each owner holds an equal part of the Title, the buyer owns partial equity in a valuable asset. As the value of the property appreciates so, too, does the purchaser’s equity.
Generally, a management company takes care of service and amenities.
Can U.S. or Canadian citizens buy Real Estate in Mexico?
Yes, citizens from other countries are eligible to buy real estate in Mexico, but it must be done through renewable bank trusts known as fideicomisos.
A ‘fideicomiso’ is a 50-year, perpetually renewable and transferable Bank Trust which allows foreigners to acquire irrevocable and absolute ownership rights to property in Mexico. This Trust is the legal equivalent of fee-simple ownership and is provided specifically for non-nationals, allowing them to own coastal and border property.
What is the most common types of fractional ownership in Los Cabos?
Fractional ownership properties in Los Cabos tend to be ocean view homes or villas, many of which are part of private residence clubs offering upscale amenities that are shared with neighboring owners. These amenities often include tennis courts, fitness facilities, business centers and concierge services.
The most common and best option is ¼ ownership (.25%), where four owners hold equal ownership percentage.
Typically there are three seasons: Winter, Spring and Summer and each quarter owner would receive one month (30 days) in each season in a rotation each year within a selective lottery process. Each year, each owner will receive a desired month guaranteed.
There is also the possibility of trading time with other ¼ fractional owners.
What is the investment potential?
Fractional Ownership provides an opportunity to build equity, as well as, an ability to rent some or all of your usage rights, allowing you to recoup your initial investment in the process.
Is fractional ownership right for you?
Fractional Ownership is more affordable than a traditional real estate investment model, with a lower overall down payment and fewer worries with regards to maintenance and property ownership responsibilities.