Fractional ownership is a business model in which several unrelated parties each buy a percentage share of a single high-value tangible asset, commonly a private jet, a yacht or a piece of resort real estate, so that no one owner has to bear its full cost or its full risk alone. A management company administers the arrangement: it maintains the asset, oversees its day-to-day operation, and guarantees each owner a set amount of access in proportion to the share purchased, while charging each owner a corresponding share of the annual management and maintenance costs plus, in many arrangements, additional charges tied to actual use. Because owners are effectively buying a percentage of an asset rather than the whole of it, fractional ownership lets people afford assets that would be out of reach to purchase outright while avoiding the burden of full-time upkeep; for assets that depreciate quickly, the management company may eventually sell the asset on the owners' behalf and distribute the proceeds, allowing owners to realize a capital loss and reinvest in a new fractional share if they choose. The model is applied across aircraft, yachts, vacation properties and motor homes, with cost-sharing as its central motivation in every case.
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Fractional ownership, multiple buyers each holding a share of a single high-value asset, is most commonly applied to vacation and resort property within the real estate industry.
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