Staff Writer
Associated Press

Salt Lake City, UT / April 7, 2010 / --  For some it is said that it is better to have a little than to have none at all - and it would seem that real estate is no exception.  The dream of owning luxury real estate without having to pay the big bucks certainly sounds worthwhile but some may venture that it's nothing more than a con. 

Fractional real estate is what we are talking about and all around the world high-end property owners are stepping up to the plate for their turn to bat.  While the concept has existed for well over 30 years with roots tied to coastal properties in Florida, owning property through fractions is more tricky than one can imagine. 

Fractional real estate is sometimes confused with time-share ownership.  Although the two may appear similar time-shares simply allow the purchaser use of the property during specific times.  Fractional real estate however allows the purchaser to outright purchase a fraction of the property as illustrated below:

As real estate markets worldwide continue to worsen, owners of exclusive high-end properties hoping to off-load junked real estate assets view fractional real estate sales as a viable option in a down market.  Yet when viewed more closely  the concept of fractional real estate isn't all that's it cracked up to be.

For starters each buyer must be liquid for the entire fractional purchase price or obtain financing through traditional or secondary markets i.e. financial institutions or private investors.  No matter the source of funds, appraisals must be obtained to determine value, but how can value be determined when no other properties exists in the surrounding neighborhoods that would be comparable?  Remember the property as a whole is not being sold, what's being sold is individual fractions of the home.

"High-end real estate in the last few years has taken a tremendous hit in large part because of a new atmosphere of buyers," says Michael Blackburn of Perfect Home Living.  "A lot of novice investors picked up on bargain sales of ski developments or golf resorts with weak or no property management oversight.  The resale of those fractional units are often plagued by the fractional owners inability to market, rent or resale but the biggest problem remains determining true value of a fractional ownership.  This is where the potential for fraud can be even greater," Blackburn added. 

Whether purchasing fractional real estate as a means to own million dollar real estate or  as a savvy investor seeking to turn the pretense of a lifestyle into a for-profit scheme, the rewards are great but the risk is even greater. 

About Perfect Home Living 

Perfect Home Living is a nationally recognized non-profit leader that assists in implementing programs and providing training and education to financial lenders, government entities, banking regulators, consumers and licensed professionals to red flags within today's  real estate market.   For more information or to request assistance please visit us online at:  http://www.PerfectHomeLiving.com or email sheri@perfecthomeliving.com