Fractional real estate, wherein an investor purchases a share of a fully furnished apartment, townhouse or detached house, has been a minor hit at Western Canadian resorts since the concept was introduced five years ago.

The main attractions for buyers are price, a share in potential appreciation and convenience.

Fractional real estate provides both a legal and use structure that makes sharing a property easy. For example, in a quarter ownership, there are four owners. Each owner would get his or her own title just for his or her legal quarter interest. They can put a mortgage on it, pay their mortgage off, or sell without having to deal with other owners.

There are a number of different programs, but the bottom line is that there is a plan so that each of the owners has absolute certainty about when they can use the home.

A third-party manager is employed to maintain the property, and all the owners contribute equally to the cost of maintenance, management, a fund for future replacement of furnishings and normal repairs. In some cases, exchanges can be made at other resort locations.

For many buyers, fractional real estate is their only option if they want to buy into an expensive market. For instance, for $250,000 a buyer could own a quarter ownership of a three-bedroom luxury townhouse at Whistler, one of Canada’s top ski resorts, which would be worth well over $1.5 million for full ownership. Usage arrangements vary between projects, from straightforward to extremely innovative.

Generally, if you own one quarter of a property you get to use it every fourth week, except if one of your weeks happens to fall on the scheduled maintenance week. If you want two or three weeks together you could either go through an exchange system that the project has set up or see if one of the other owners wants to trade weeks. Some plans provide for use for two weeks at a time, or a month at a time. Also there are more flexible arrangements where there is scheduled time for peak demand periods but usage for the rest of the year is based on a rotating selection process

Financing a fractional ownership can be a challenge as many lenders aren’t familiar with them. If the project is big enough or if it is in a major resort area, the lenders may have already put a financing package together for the project. Otherwise it’s often means using a mortgage broker to find a lender who will make the loan. Many buyers pay cash and others will re-mortgage their home or another property in order to buy their fractional property.

Fractional costs are higher than if the home was sold for full ownership. The reason is that the developer ends up with higher legal, marketing and financing costs. Typical premiums across North America range from 10 percent to 60 percent depending on the size of the fraction.

There is limited information on resales of fractional real estate because the concept is so new. At Whistler the first major quarter share project sold in 1998 and several hundred quarter shares have been sold since. There were 50 quarter-share resales in 2003, typically at a nice uplift in price over the original purchase. In one instance, a quarter share purchase had increased in value by more than 50 percent in five years, but there are no guarantees.

If you are planning on a fractional share the best advice is to buy for enjoyment, not for profit.

For informationon fractional real estate, a veteran in this niche field is Bryan Wooley, president of Maverick Real Estate Corp., of Vancouver, B.C. with offices in Calgary, Kelowna, Seattle and Denver. Wooley can be reached at 604 661-1868, or

Frank O’Brien can be reached at


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