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8. Will I be allowed to swap for time at other fractional properties?
Part of the allure of time-shares is that you can trade time at your home resort for weeks at thousands of other places around the world using a network of properties like Interval International or RCI. If you own a fractional property, however, your swapping options may be limited to your resort's corporate family or to properties that have exchange agreements with your resort. For example, Tammy Perconti was able to trade one of her weeks at the Residences at Esperanza for a spot at the Timbers Club in Snowmass Village, Colo., but only because the resorts have an agreement. Some resorts also belong to networks like the Registry Collection (theregistrycollection.com) or Resort to Resort (resort2resort.com), which allow swapping between participating properties.
9. Could I get stuck with a lemon?
Time-shares had a negative reputation in the 1970s and '80s, when lax regulations made it possible for shady developers to rip people off with substandard developments. Although the industry has been cleaned up since then, prospective time-share or fractional buyers may still worry that they'll end up the victim of a scam. If you're thinking of buying a property from a developer that's not a known brand like St. Regis or Four Seasons, do extensive research first. Check with the Better Business Bureau to see if any complaints have been lodged against the company and search the Internet for fraud claims. Anyone placing a down payment on a resort that's still being built should ask to see the plans. You'll want to know from the start if construction isn't going according to schedule.
10. Can I make money on a fractional?
The experts agree: Don't buy a fractional as a pure real estate investment. "There's no guarantee at all that it's going to appreciate," Gunderson says. While the value of fractionals hasn't decreased in the housing market's recent downturn, the high cost means that the number of potential buyers is limited, and selling could be difficult. The housing slump has also made it cheaper to buy a vacation home outright, further siphoning off fractional buyers. Tammy Perconti, the Cabo San Lucas buyer, says she didn't think about her property solely as an investment, but rather as a lifestyle change. "From the moment I arrive, I don't worry about a thing," she says.
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