Fractional Ownership – the Environmental Benefits

What is Fractional Ownership?

For those not familiar with the concept, fractional ownership involves a group of people purchasing an asset that they do not want or need to use all of the time. They buy a "fraction" of the asset that entitles them to the amount of time that they need to use it. This is typically used for leisure assets such as second homes, yachts, cars etc. although it finds another application for functional items such as expensive business equipment or tools.

What Are the Environmental Impacts of Owning Leisure Assets?

This varies depending on the type of asset you are considering. Second homes occupy valuable land, sports cars consume scarce natural resources, and yachts put pressure on the limited and fragile coastal environment through the construction of marinas and associated service. All assets consume energy and resources as part of their manufacture.

Second homes can also cause resentment in local communities especially if they are left empty for much of the year. They are seen to be driving up the cost of local real estate whilst contributing little to the local economy.

How Can Fractional Ownership Help?

It is estimated that the average second home is only occupied for 4-5 weeks in a year. Sometimes owners will fill up the remaining weeks by renting the real estate out but the difficulties of arranging changeovers and keeping the home in a state that is suitable to rent discourage many. The use statistics for yachts and boats are the same if not worse. The desire to own a sports vehicle may result in it being used on a regular basis. It might be preferable to own something more practical and economic for regular use, and keep the fractionally-owned sports vehicle for occasional trips.

There is obviously the potential for more than one person/family to own the typical leisure asset. Most people (excluding the retired) would be able to share the use of a leisure asset with 3 others without significantly impacting on the opportunities to use it. A degree of compromise is required on use at very popular times, but the upside is more flexibility to have other holiday experiences or even buy additional fractional leisure assets. One problem with outright ownership of leisure assets can be the pressure to use them whenever you can, when you might want to do something different.

Fractional ownership also helps with pressure on local communities from second home ownership. As more people can share a smaller number of homes the affect on the local real estate market should be less. A fractional ownership second home will typically be occupied more frequently and will therefore contribute more to the local shops, restaurants, leisure facilities etc.

A Word of Warning

This article takes the view that fractional ownership will result in fewer leisure assets overall. It is possible if the concept really takes off that the increased number of people able to afford fractional leisure assets will actually increase the number of second homes, yachts etc. that are purchased. In this case the environmental benefits won't have been achieved but there will be a lot of happy people!

Neil Robertson owns a fractional ownership website where you can read more great articles on the fractional ownership of real estate, yachts, cars etc.