Buying Expensive Assets Outright Has its Own Risks
When we make any major purchase we expose ourselves to some form of financial risk - we may not be able to afford the upkeep of the asset or a mortgage on it (due to changes in employment etc.), the resale value may be poor, purchasing may have been less cost-effective than renting/leasing etc. But how is the risk equation altered when you decide to buy into a fractional ownership scheme rather than buying an asset outright?
Fractional Ownership Risks
Firstly, one of the major risks is reduced - you should be less financially stretched because you have bough a part of an asset appropriate to your requirements rather than paying the whole cost.
If you buy into a syndicate formed for the purpose of buying a particular asset there are some additional risks associated with your fellow fraction owners - will they be afford to be able to keep paying for their share of the maintenance costs? Can the remaining fraction owners afford to pay extra if anyone can't afford to pay their share? This type of risk needs to be assessed even more carefully if there is any joint borrowing involved.
If you buy into a private residence club or destination club then the risks depend on the ownership structure format of the club in relation to the assets that it controls. Deeded shares limit the extent of risks arising from the operating company failing or performing badly. All schemes would suffer if the management company failed to provide agreed services, however you are insulated from their financial performance if you own a deeded share of a particular home. This is because whatever happens to the overall scheme, if you own a deeded share in a home you have an asset that can be sold to get (a proportion of) your money back.
However if you opt for a non-deeded holiday club (some destination clubs fall into this category) you need to be very concerned with their financial stability and management. A commitment to refund your membership fee may come a long way down the list of creditors if the club gets itself into financial difficulty. This is one reason why schemes that feature some form of direct (deeded) ownership (whether directly or through a company formed for the purpose) are preferable.
Owning a deeded share also gives the possibility of benefiting from increases in real estate value, whereas the best that a lot of destination clubs offer is the refund of a percentage of your membership fee. This is not usually a factor for assets other than real estate (e.g. yachts, cars, planes) as they do not usually increase in value. The points above about the security of your financial contribution still apply.
Conclusion
I firmly believe that overall, buying an asset using a properly structured fractional ownership scheme has lower risk and is a more efficient us of money than buying outright. As with any large purchase you are advised to investigate the details of what you are buying and get as much advice as you can.
As we all know, the body system produces certain cells called antibodies which have the role to fight against bacteria and viruses. In a person who suffer from Systemic lupus erythematosus, the body creates cells which fight against its own tissues. In addition to this, the autoantibodies attack certain parts of the body producing symptoms like inflammation and pain. Moreover, a great number of this destructive cells can damage the whole body systems affecting areas, such as the skin, muscles and joints, kidneys, lungs, brain, heart and digestive system.
What is more is that certain medicines can cause drug-induced lupus with the same symptoms. So, two of the medicines which produce lupus are procainamide which is usually used in treating arrhythmias and also hydralazine, used in treating high blood pressure.
Moreover, other medicines which may produce drug-induced lupus are chlorpromazine (tranquilizer), quinidine (used in to treat arrhythmias), methyldopa and isoniazid.
It is important to mention that the symptoms of lupus may appear only if a person increase the number of medicines which have a high risk in producing lupus or tend to take them for long periods of time.
Even though is not totally confirmed, other medicines which are used for certain affections may cause lupus. Some of these medicines include: an antibiotic known as phenazine; penicillamine used to treat rheumatic diseases; cimetidine known as treating excess stomach acid and not in the last place a drug called captopril also used to treat high blood pressure.
Taking all these into consideration, people should be aware of the damages that certain medicines which are taken for long periods of time and in big quanities may cause. Moreover if we notice unusual symptoms which may indicate the presence of lupus in our body system we should ask for medical help and follow an appropriate treatment in order to reduce and alleviate the condition.
Both Neil Robertson & Groshan Fabiola are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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