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Private Jet Fractional Ownership

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Savvy business executives know that traveling is a big part of their career. Getting to an important meeting on time anywhere in the world can be the deciding factor in whether or not you seal the deal. You need global transportation that is convenient and cost effective, ready to go whenever you are. This is why some choose to purchase an executive jet for business use. But you may have questions about which will provide the best fit for your travel needs: private jet ownership or jet rental?

If you own a jet fully, then that aircraft can be available for your use exclusively. You are, however, locked into that one jet, which might or might not provide appropriate transport for your needs. Lighter craft are suited for short trips, while heavier craft are best for longer ones. Some businesses find it more cost efficient to own a fraction of a jet. Although you might save some money at the outset, there are some problematic issues associated with this type of ownership. If all the owners want to travel at the same time, such as a busy holiday weekend, you may not have access to the aircraft even though you have paid your share for its use. You are also responsible for all of the costs associated with running the jet, including personnel costs, plane maintenance and ever-rising fuel expenses. These costs, over time, can be formidable, and for a jet that might not be available when you need it.

Jet rental, on the other hand, offers you a great deal of flexibility. With only four hours notice, you can be up in the air flying toward your destination. You never have to worry about whether or not a jet will be available. There are thousands of corporate jets to choose from, including everything from light jets to heavy and even jumbo jets.

Another advantage that comes from using charter jets is that you will no longer have to take time out of your busy schedule to make all of the reservations and plans that must occur before you take off. A good air charter brokerage will offer you a personal aviation consultant, who can ably handle all of your travel details for you. Simply make your requests known, and your expert consultant will manage them for you efficiently.

Patrons of charter jets also save on costs because you only pay for what you use. When you own the jet, you pay for the use of the jet not only when you are in the air, but also when it is parked in the hangar. For these reasons, many businesspeople prefer the flexibility and cost-benefit that comes with jet rental over jet ownership.

Private Jet Fractional Ownership

The Popularity of Fractional Ownership

The recent increase in popularity of fractional ownership is well documented, with a lot of the growth coming from new development schemes fro large developers. With the larger numbers of fractions being bought, it is inevitable that some of them will be re-sold. But having decided to sell your fraction, how do you go about valuing it?

Valuation Methods for Fractional Ownership

The traditional method for valuing real estate would be to engage an expert realtor (estate agent in the UK) to the job for you. Ideally consult with several to get different opinions (this is usually easy given the number of real estate businesses there are). When valuing a real estate fraction this approach might is more difficult since the re-sale market is still small and the number of businesses working in this area is few (although growing quickly). So how can you value your fraction? The following are some ideas of ways to assess value:

1.Find out how much the developer is selling fractions for now. If the resort/home you bought a fraction in is still being actively sold it should be a simple matter to find out from the developer what their current price is. You would often need to discount this price to achieve a reasonable re-sale price.

2.Find out how much real estate prices have increased (or fallen) by since you bought your fraction. Apply this percentage change to the original price of your fraction.

3.Consult an expert. There are some emerging experts and websites in the fractional ownership market who should be able to give you an opinion on the value of your fraction. This advice should be free unless you decide to sell your fraction using their services.

My advice would be to use a combination of all of the above methods before deciding on a value for your fraction.

Advertising Your Real Estate Fraction for Sale

This presents another problem in that the fractional re-sale market is relatively immature. Probably the best places to advertise your fraction for sale are the types of sites/publications that you would advertise real estate in. In this way you can access a large potential market.

Rules on New Members of Fractional Ownership Schemes

Often there is a worry about the sale of fractions in existing schemes and whether this will cause problems. The main concerns are normally over the allocation of time, payment of maintenance dues, and changeover problems (not leaving at the agreed time or leaving things dirty/broken etc.). Sometimes there is an attempt to counter this in the fractional ownership agreement by having a clause that new members need to be approved by the existing members. In my view this is a mistake. The focus should be on ensuring that the time allocation and changeover rules are clearly defined in the original fractional ownership agreement. In addition there should be clear and extensive penalties for failure to comply with these. The worry over payment of maintenance dues is easily dealt with by having a clause in the agreement that the fraction owners cannot use the home unless their maintenance dues are paid.

It is also worth considering how disruptive a fractional scheme member might be if they had a sale lined up, only to be refused permission to sell. Would they then be a constructive and helpful member of the group or would they be bitter and resentful?

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About Author

Both Wayne Hemrick & Neil Robertson 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.

Wayne Hemrick has sinced written about articles on various topics from Debt Consolidation, Cooking Tips and Real Estate. Jonathan Blocker is an avid business and travel writer. He has been traveling on commercial airlines and for several years. He has traveled millions of m. Wayne Hemrick's top article generates over 301000 views. to your Favourites.

Neil Robertson has sinced written about articles on various topics from Credit Cards, Home Management and Family Travel. Neil Robertson owns a website where you can read more great articles on the fractional ownership of. Neil Robertson's top article generates over 14800 views. to your Favourites.

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