One of the first things a developer must establish when structuring a fractional development is the length of time they will sell.
There is no set size for a fractional. It can be anything from two weeks to a twelfth or even a quarter of a year.
The size chosen depends on a variety of factors:
When deciding on the size of the fractional, developers should consider how many units the property has, the sale price and return on investment they require and seasonality. The market average for a fractional is between four and six weeks. However some competitively priced schemes can do well when sold in units of two weeks upwards.
Developers should also consider the usage structure of the fractional – whether it will be sold on a fixed or rotational basis. Fixed fractions allow owners to visit only on the dates they have bought each year. Rotational fractions are more flexible and appeal to people who want to be able to visit the property at different times. A rotational fractional can also be more popular in locations where there are marked seasons as this will allow each buyer to visit the property at peak times.
Many properties allow owners to visit on a more ad hoc basis – whenever the fractional is available. This can be very appealing and supports people’s desire to feel like they own the property.
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