Does the loan bear my name?

If you secure financing from Fraxioned for your share purchase, the loan will be under your name. This personalized financing approach ensures that you have full ownership and responsibility for your investment. With a loan tailored to your needs, Fraxioned strives to make fractional ownership a seamless and rewarding experience for every investor.

Is it possible to book consecutive stays?

Fraxioned's booking policies are designed to ensure fair and equitable access to vacation homes for all co-owners. While you're able to book consecutive stays, there must be a gap between your arrival and your prior departure. Each Owner has the flexibility to reserve their Property for longer periods, up to 14 consecutive days per share of ownership, depending on availability. For Owners with multiple shares, the maximum duration for a single stay increases incrementally by 7 days per additional share, capped at a maximum of 28 days. Consecutive Stay Rule: If an Owner wishes to book multiple stays within close succession of each other, they must leave a gap of at least 5 nights between stays. This prevents owners from monopolizing blocks of time at their Property.

FAQ | Fraxioned

General

Ownership

Buying

Scheduling

Financing

Selling

Real Estate Agents

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General

What are the pros of fractional investing?

Fractional investing lets investors buy partial shares of high-priced assets like stocks or real estate using smaller investment amounts. It facilitates portfolio diversification with limited capital and allows to spread challenges across different markets that may otherwise be unaffordable. This promotes financial inclusion and investment flexibility.

What is the legal structure of fractional ownership?

The legal structure of fractional ownership typically involves establishing an operating agreement or entity, such as a limited liability company (LLC). This agreement outlines the rights, responsibilities, and governance structure for co-owners, including decision-making processes, usage rights, and financial obligations. By formalizing the legal framework, fractional ownership arrangements provide clarity and protection for all parties involved, ensuring smooth operation and dispute resolution.

What is an example of fractional ownership?

An example of fractional ownership is when multiple individuals purchase shares in a vacation property, such as a beachfront condo or a ski chalet. Each owner holds a percentage of the property, typically represented by shares or ownership units, and has the right to use the property for a designated period each year. Fractional ownership allows individuals to enjoy the benefits of vacation home ownership, such as access to desirable locations and amenities, at a fraction of the cost of sole ownership.

Can I finance fractional ownership property?

Financing for fractional ownership differs from traditional home mortgages. We suggest consulting your mortgage lender for options like a HELOC. Additionally, we facilitate 1031 exchanges for those seeking tax benefits and investment diversification.

Financing

How do I schedule the dates when I want to enjoy the property?

To plan your visits to your Fraxioned property, access our convenient online calendar to view availability and book your desired dates. If you require assistance or have any questions, our dedicated Owner Services Team is ready to assist you every step of the way. Enjoy hassle-free scheduling and seamless experiences with Fraxioned.

Scheduling

What is Fraxioned?

Fraxioned is a vacation home co-ownership company. We help buyers purchase and enjoy a share of a luxury vacation home. We handle every aspect of the process - from sourcing the ideal property in desirable destinations to designing and furnishing the home, to ongoing property management. Fraxioned's turnkey approach allows you to embrace the vacation lifestyle without the hassle of traditional second home ownership. We're dedicated to curating exceptional living experiences that exceed the expectations of today's sophisticated vacation home buyers.

General

What is Co-ownership of a property?

Co-ownership of a property is a model where multiple individuals or entities share legal ownership and rights over a single property. In simple terms, it means that the property belongs to more than one person or party. It is a common arrangement for real estate investments, families, or partners who wish to collectively own and manage a property.

Ownership

What extra costs do I need to pay over and above the share price upon purchasing?

In addition to the share price for the property, there are some additional one-time costs at purchase. These typically include closing costs like legal fees, transfer taxes, closing costs, property transfer taxes, and any administrative fees. Fraxioned provides detailed estimates of these ancillary expenses upfront for full transparency.

Buying

Can my fractional shares be transferred to a family member upon my death?

Yes, your fractional ownership shares can be transferred to a family member or other beneficiary upon your passing. Fraxioned's co-ownership agreements allow for straightforward transfer of shares through inheritance or willful reassignment. This provides flexibility to keep the vacation home in your family's possession or have it pass to designated heirs after your lifetime.

Selling

Does this work like a regular real estate transaction?

No, this is not a typical real estate transaction. As the home is owned by a property-specific LLC and owners own a share of the LLC, the process differs slightly from a standard real estate transaction. However, our sales team will guide you through the process, handling all the work and heavy lifting to ensure a seamless experience.

Real Estate Agents

Can I finance my purchase from fraxioned?

At Fraxioned, we provide limited financing options for fractional ownership properties, and availability varies depending on each property's regulations. While we may offer some financing solutions, we typically recommend exploring options with your mortgage lender, including Home Equity Lines of Credit (HELOCs), which can be a flexible and viable way to finance your investment in a fractional property.

Financing

Do I have to meet my co-owners?

You are not required to meet your co-owners. Fraxioned handles all communications and arrangements among owners, guaranteeing a streamlined and stress-free experience for all parties. Rest assured, your investment journey with us is designed for convenience and peace of mind.

Scheduling

What is Fractional Co-Ownership?

Fractional co-ownership is an innovative approach to vacation home ownership. Rather than buying an entire vacation home outright, fractional ownership allows you to purchase a share or "fraction" of the property - dividing both the ownership and usage rights. Each co-owner enjoys exclusive use of the home during scheduled stays throughout the year. With a one-eighth share, you'll have access to the home for 44+ nights annually, providing ample opportunities to relax and create unforgettable memories in your dream vacation getaway.

General

Do I actually have ownership of the property?

Yes, you have real ownership when co-owning a property through a property-specific LLC, where you and co-owners collectively own 100%. Your ownership interest can be sold or transferred. The extent of your ownership rights and responsibilities will depend on the specific co-ownership agreement.

Ownership

Can I sell my ownership of the property?

Yes, with Fraxioned, you have the flexibility to sell your ownership share after a pre-determined holding period.

Selling

Are the fractional ownership properties fully furnished?

With Fraxioned, each property is fully furnished by an interior designer and stocked with family activities, such as paddle boards and kayaks if your vacation home is by a lake.

Buying

How does Fraxioned compensate Real Estate Agents?

Fraxioned compensates real estate agents with the industry standard 3% commission from the share price.

Real Estate Agents

Can I pay off my loan early, is there any prepayment policy?

Yes, with Fraxioned, you have the flexibility to pay off your loan early without any penalties. Fraxioned imposes no restrictions on prepayment, so you're free to pay down your financing balance at your own pace. Whether you choose to pay off the loan over the full term or accelerate the payoff, our financing options are designed with your financial goals in mind.

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Financing

How do short notice stays work?

Short notice stays, facilitated through our Last Minute Bookings (LMBs), enable owners to reserve the property if it remains unbooked within 3 nights of a specific date. Notably, these bookings do not deduct from your total allotted days, granting you the flexibility to optimize your property usage to the fullest extent possible.

Scheduling

How is fractional ownership different from a timeshare?

The key difference between fractional ownership and a timeshare model is ownership. With fractional ownership, you and a select number of co-owners share legal ownership of the property, allowing for more flexibility and control over your investment. Each owner typically has a set amount of time allocated for personal use, ensuring exclusive access to the property during designated periods.

Timeshares, on the other hand, only provide the right to use the property for a set number of days or weeks. While timeshares offer a level of flexibility in terms of location and duration of stay, they do not provide actual ownership of the property.

General

Who furnishes the home?

Fraxioned takes care of furnishing and equipping vacation homes for its fractional co-owners. We work with expert interior designers to thoughtfully decorate each property, creating luxurious and comfortable living spaces tailored to the home's unique style and location. The homes are outfitted with high-end, luxurious furnishings and finishes, as well as the latest smart home technologies.

It's a completely turnkey experience where you can simply arrive and start enjoying your getaway.

Buying

How does Fraxioned resale work?

As a Fraxioned owner, you have full autonomy over the sale of your ownership share. You can choose to sell your interest at any time, setting the price as you see fit. To help you determine the optimal listing price, Fraxioned will provide a current market analysis for your specific share. When you're ready to sell, Fraxioned will leverage its established marketplace of pre-qualified buyers to facilitate the transaction.

Selling

Can I keep personal items at my home?

We try to provide a designated space for owner lockers at each property. Here, owners can securely store smaller personal belongings for their visits.

Ownership

I have a buyer interested in Fraxioned. What is the next step?

The next step is to reach out to Fraxioned. We enjoy collaborating with realtors and can provide answers to any questions, guiding you through the sales process. You can even arrange an introduction with your interested buyer to our sales team.

Real Estate Agents

To whom do I make my loan payments, and at what interval?

You make your loan payments directly to Fraxioned every month. Fraxioned will provide you with regular invoices outlining the payment amount due each month for your financing of the fractional ownership share. This streamlined payment process is designed to make managing your obligations as a co-owner simple and straightforward.

Financing

Do owners have a priority rank order for scheduling?

No, owners do not have a priority rank order for scheduling; reservations are made on a first-come, first-served basis. Dates can be booked up to 24 months in advance, ensuring fairness among owners. Our system promotes equity by restricting the repeated use of the same holiday each year and preventing the monopolization of peak tourist seasons.

Scheduling

Does Fraxioned manage each home directly?

Yes, Fraxioned oversees the co-ownership structure and overall property operations. We collaborate with reputable local property management firms in certain markets to handle day-to-day tasks for our co-owned homes. Our tech platform facilitates seamless communication between co-owners and managers, ensuring consistently high standards across all our vacation rental properties.

Ownership

How much does a fractional share cost?

The cost of a fractional share varies depending on diverse factors such as the property's value, location, and the percentage of ownership desired. Fraxioned offers shares typically ranging from 1/8th to 1/13th ownership interests.

Our detailed cost information allows prospective co-owners to clearly understand the investment required to purchase a fractional share in one of our premium vacation rental properties.

Buying

What is the process to fractionalize my home?

Fraxioned oversees the transfer of your home through a dedicated property-specific LLC. After finalizing the transaction, your ownership interest in the LLC aligns with the percentage of the home you opt to retain. The residual portion of your home is subsequently sold to other Fraxioned buyers. This approach allows you to unlock the value of your property at an enhanced rate while benefiting from the comprehensive management services provided by Fraxioned.

Selling

How many weeks are typical of fractional ownership?

We don't require you to stay at your home in week blocks; instead, we go by nights. With 1/8 ownership, you get 44 nights a year, with 1/10 ownership, you get 37 nights a year, and with 1/13 ownership, you get 28 nights a year.

General

When is the commission paid?

The commission is paid to the real estate agent within two weeks after closing.

Real Estate Agents

What is the approval process?

The approval process for becoming a Fraxioned fractional co-owner is straightforward. It begins with scheduling a call with Fraxioned's sales team. They will work closely with you, addressing any questions you have and guiding you through the steps to complete your approval. Fraxioned's goal is to make the onboarding process as smooth and transparent as possible.

Financing

How many advance stays can I schedule?

As a Fraxioned co-owner and with availability permitting, you can secure a last-minute stay at your fractional property with as little as 4 days' notice. Enjoy the convenience and flexibility of spontaneous bookings tailored to your schedule.

Scheduling

Why would I opt to utilize Fraxioned to sell a portion of my house?

Leveraging a service like Fraxioned to sell a portion of your house can provide several potential benefits. If you're finding that you don't have the time or resources to fully maintain your property, Fraxioned could offer a way to free up some capital while still retaining partial ownership and usage rights. This could be especially appealing if you want to reduce the financial burden of managing a larger home.

Additionally, Fraxioned's model allows you to continue enjoying your property without the sole responsibility of ownership, potentially making it a more accessible and manageable option compared to a full sale.

Selling

What annual costs will I have to pay as a Fraxioned owner?

As a Fraxioned owner, you'll pay annual dues each year. These are calculated based on the specific property's operating costs and your ownership percentage. The annual invoices will be issued by January 1st for the upcoming calendar year's dues amount. During the sales process, our team will provide you with the projected annual dues for any property you're considering.

Ownership

How many fractional shares can I own?

You can own multiple shares of a vacation home. Want more nights each year? Buy 2 shares. We have owners who have shares in our Bear Lake homes and shares in our St. George homes. They get the best of both worlds in Utah.

General

Does my share increase in value if the home appreciates in value?

Yes your share would increase in value if the vacation home value increases.

Buying

How long are owner stays?

Owner stays must adhere to specific guidelines: a minimum stay of 3 nights and a maximum stay of 14 nights per shared ownership, with a cap of 28 nights. Additionally, if booking multiple stays consecutively, there must be a gap of at least 5 nights between stays. These guidelines ensure fair and equitable usage among co-owners while maximizing the enjoyment of the property.

Scheduling

What are the risks of fractional ownership?

Fractional ownership carries risks like limited control over decisions and potential conflicts among co-owners. However, Fraxioned mitigates these risks through clear communication channels, structured governance, and expert management services. We ensure a seamless ownership experience while maximizing the benefits of shared ownership.

Ownership

What does a property management company do?

A property management company, like Fraxioned, handles various tasks related to property upkeep and operation. This includes property maintenance, tenant management, rent collection, financial management, and handling legal matters. Fraxioned ensures your property is well-maintained, maximizing its value and providing a hassle-free ownership experience for co-owners.

General

Can owner borrow against their ownership interest?

No, Fraxioned does not allow co-owners to borrow against or leverage their fractional ownership interest in the properties. Your ownership share represents an equity stake, but cannot be used as collateral for financing.

Buying

How quickly can I get approved?

You can typically expect the approval process to be completed within 14 days. However, the exact timeline may vary depending on the specific circumstances and requirements of your application.

Financing

Is there a financing fee?

Yes, there are normal and customary fees and/or points associated with financing fractional ownership properties. These fees cover various aspects of the financing process and may vary depending on the specific terms of your financing arrangement.

Financing

What kind of LLC does Fraxioned create?

Fraxioned utilizes a multi-member manager-managed LLC structure. These LLCs serve as a cohesive entity representing and safeguarding the interests of our buyers. Each LLC possesses its own bank account, tax ID number, and holds the title to the Fraxioned property, ensuring clear ownership and streamlined management processes for our clients.

Ownership

Can owners rent out the residence?

Yes, Fraxioned's co-owners can rent out their share of the vacation home through the Fraxioned Collective program.

The Fraxioned Collective is a rental management service that allows co-owners to easily list and rent their allocated usage time to third-party guests. Fraxioned handles all the marketing, booking, cleaning, and other logistics, so owners can simply sit back and earn income from their vacation home investment.

Buying

How many consecutive stays can I schedule?

Each Owner has the flexibility to reserve their Property for consecutive stays, depending on availability and other specific rules.

Fraxioned's booking policies are designed to ensure fair and equitable access to vacation homes for all co-owners. While you're able to book consecutive stays, there must be a gap between your arrival and your prior departure.

Scheduling

Are the properties insured?

Yes, our Fraxioned vacation homes are all insured.

General

Does the property have a loan?

Depending on the number of buyers who finance their purchase versus the number of cash buyers, the property may or may not have a loan. In any event, the loan will not exceed Fraxioned’s lending guidelines, which are designed to protect the interests of all owners.

Financing

How many special dates can owner hold?

Owners are allowed to reserve one Off-Season holiday per year, per share owned, and one Peak-Season holiday every two years, per share owned. This policy ensures fair access to the fractional home during holiday dates for all owners.

For example, if an owner books a stay for President’s Day 2025, they may not book any other Off-Season holidays that year. However, they could book a Peak-Season holiday like Memorial Day 2025, understanding they won't be allowed to book another Peak-Season holiday until 2026.

Scheduling

Can owners rent out their time on Airbnb or similar sites?

No, Fraxioned co-owners are not allowed to independently rent out their allocated time in the vacation home on Airbnb, VRBO, or other public rental platforms.

Fraxioned requires all owners to be registered under the Fraxioned Collective Model to access the property. This maintains the exclusivity and security of the fractional ownership model. Co-owners are not permitted to independently list or rent out their time to the general public through other vacation rental sites.

Buying

Is LLC co-ownership new to real estate?

No, co-ownership through LLCs is not new to real estate. This model has been used for several years, especially for investment properties and vacation homes. However, Fraxioned's platform streamlines and simplifies the process, making fractional real estate ownership more accessible and convenient for individual investors.

Ownership

What home insurance does fraxioned arrange on behalf of the co-owners of the property?

Fraxioned arranges comprehensive home insurance coverage on behalf of co-owners, protecting against risks like property damage, liability claims, and natural disasters. Our tailored policies safeguard the interests of all co-owners, providing peace of mind. This ensures a secure, worry-free ownership experience for everyone invested in the property.

General

What are the finance options available?

Fraxioned offers limited financing options tailored to each property, ensuring accessibility and ease for interested owners. These in-house financing options are property-specific and subject to qualification criteria. Additionally, owners have the flexibility to explore alternative financing methods such as Cash and Home Equity Line of Credit (HELOC).

Rest assured, our dedicated team will provide comprehensive guidance throughout the financial process, ensuring a seamless and stress-free fractional ownership investment experience.

Financing

Can I swap stays with other owners?

No, there isn't a formal mechanism for owners to swap stays with each other. Our booking system operates on a first-come, first-served basis, with rules ensuring fairness and equity among owners.

While swapping stays hasn't been necessary, each owner enjoys flexibility in choosing dates based on availability on the online calendar. This approach ensures a seamless and equitable ownership experience for all.

Scheduling

Is LLC Ownership the same as tenants in common (TIC)?

No, LLC ownership isn't the same as a tenants-in-common (TIC) situation. With a TIC, each owner has an undivided stake in the entire property. But with an LLC, the LLC itself owns the property outright, and you as a member own a slice of the LLC pie.

LLC provides more structured governance, liability protection, and potential tax advantages over a TIC arrangement.

Ownership

What costs are involved in running and managing the property?

As a Fraxioned co-owner, your ongoing costs are conveniently bundled into just the annual dues and a cleaning fee per stay. The annual dues comprehensively cover utilities, insurance, maintenance, repairs, and reserves for the property.

General

Do I need an agent to buy a home in Fraxioned?

No, you do not need an agent to purchase a share of a vacation home with Fraxioned. We gladly accept buyers with or without realtors.

Buying

What down payment is required to purchase a share of a second home?

To acquire a share of a second home through Fraxioned, an initial down payment ranging from 30-40% is typically necessary. This upfront investment secures your ownership stake in the property, while the remaining balance is financed over a predetermined period, making luxury vacation home ownership more accessible and affordable.

Financing

How far ahead can I book a stay?

You can book stays up to 24 months in advance, providing ample opportunity to plan your vacations with precision. Our user-friendly online calendar allows you to check availability and schedule your stays accordingly, ensuring a seamless and stress-free booking experience. Enjoy the convenience of planning your getaways well in advance with Fraxioned.

Scheduling

Do shared ownership properties increase in value?

Yes! Shared ownership properties have the potential to appreciate in value, just like traditional real estate. With Fraxioned's strategic management approach and commitment to property enhancement, co-owners can expect their investments to grow over time, delivering excellent returns and value appreciation.

General

How much time will I have in my home each year?

The amount of time you have in your home each year depends on your ownership share. With 1/8 ownership, you'll have 44 nights a year, 1/10 ownership grants 37 nights, and 1/13 ownership offers 28 nights annually.

Ownership

What if I need to cancel a stay that I have already booked?

If you need to cancel a booked stay, simply contact our Owner Services team for assistance with the cancellation process. Please note our cancellation policy: Cancelling more than 7 nights' before the start of your scheduled stay allows you to reclaim the nights to your total number of allotted annual nights.

However, cancelling with less than 7 nights notice or neglecting to cancel until after check-in will result in the nights not being reclaimed to your total allotment. Additionally, a cleaning fee will still be charged for the booking. Rest assured, our team is here to support you through any changes to your plans.

Scheduling

What services are offered to second home owners with Fraxioned?

With Fraxioned, you don't have to worry about the hassles of second home ownership. We take care of it all - property maintenance and repairs, paying the bills and taxes, managing the legal LLC, enhancing our technology platforms, and providing you with dedicated support 365 days a year. As a Fraxioned co-owner, you simply get to enjoy your luxury vacation home without any of the typical headaches.

Ownership

Do I benefit from a growth in the property value?

Yes, as a co-owner you directly participate in any appreciation of the property's value over time. Fraxioned selects high-end homes in desirable vacation destinations with strong potential for value growth. If the market value of the property increases during your co-ownership tenure, your ownership share gains value proportionally.

General

Is fractional ownership risky?

No, fractional ownership through Fraxioned is not inherently risky. In fact, it can be a smart and secure way to own a luxury vacation home. By sharing ownership with other co-owners, you spread out the financial responsibilities and minimize individual risks. Fraxioned also handles all the property management, maintenance, and bookings, so you don't have to worry about the day-to-day hassles. As you own a share of the real estate, there is potential for the property to appreciate over time, providing a good investment opportunity.

General

Can Fraxioned modify the owner-operating agreement?

Fraxioned has some flexibility to make minor, non-material changes to the owner-operating agreement on behalf of the co-ownership group, such as adjustments (like change of address) for state reporting purposes. However, any significant or material modifications to the agreement require a formal vote and approval by the ownership group.

Ownership

What is the role of a Home Manager or a Property Concierge?

As a Fraxioned co-owner, you'll have a dedicated Owner’s Services team who serve as your personal contacts for the home. They can assist you with scheduling and address any questions you might have about the property. Upon joining, they'll conduct a welcome call with you, guiding you through the booking process and explaining how your home operates. Rest assured, they're always available to provide support and answer any inquiries you may have.

Scheduling

What is Fraxioned's cancellation booking policy?

Fraxioned's cancellation booking policy states that if an Owner cancels a booking more than 7 nights before the scheduled stay, they will reclaim the number of nights in the booking to their total number of allotted annual nights. However, if the cancellation occurs with less than 7 nights' notice, the Owner will not reclaim the nights to their total number of allotted annual nights.

Furthermore, if the Owner neglects to cancel until after the time of check-in, they will still be charged a cleaning fee for the booking.

Note: Owners will not reclaim an allotted holiday if they cancel with less than 7 nights' notice.

Scheduling

Is fractional ownership worth it?

Definitely, Fractional ownership can certainly be worthwhile for many people. It provides a way to enjoy a luxury vacation home and build real estate equity without the full costs of whole ownership. By sharing the purchase price and ongoing expenses with other co-owners, fractional ownership makes a high-end second home more financially accessible.

General

What if another owner damages the home?

We have cleaners come in after every stay to clean and assess the home. If there are any damages after a stay, the owner will be billed for any damages that occurred during their stay.

Ownership

Is Fraxioned a timeshare?

No, Fraxioned is not a timeshare - it's a true co-ownership model that enables you to own your vacation homes at dream destinations. With Fraxioned, you and a small group of 2-8 other owners purchase and share legal ownership of the property. This is a fundamentally different experience than a timeshare, which typically provides "usage rights" without actual ownership.

With Fraxioned, the property is not shared among dozens or even hundreds of timeshare owners annually. It's an exclusive arrangement that provides all the benefits of a luxury second home, with none of the restrictions of a timeshare.

General

What happens regarding any damage to the property?

We have cleaners come in after every stay to clean and assess the home. If there are any damages after a stay, the owner will be billed for any damages that occurred during their stay. Also, with annual dues each owner puts money into a reserve fund for repairs and maintenance needed on the home.

Ownership

Who Maintains the Property?

Fraxioned partners with professional property management companies and cleaners to ensure the ongoing maintenance of each property. As an owner, you won't need to lift a finger to maintain the home. At Fraxioned, we're dedicated to providing you with a hassle-free vacation home experience, taking care of your property inside and out.

General

Frequently Asked Questions

How does fractional real estate work

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