Imagine owning your own pied-a-terre in Paris, Rome, Barcelona or even all three locations. In this economic climate it might be unlikely that you can buy even one extra vacation home in any of these locations but fractional ownership might make it possible. First of all it’s not a timeshare, it is a percentage share of an expensive asset –in this case luxury vacation rentals. Shares are sold to individual owners and turns are taken in sharing the luxury property that you decide to co-own. A fractional owner enjoys priorities and privileges, such as reduced rates, priority access on holidays and income sharing. Why deal with the hassle of fully owning a property that you will only spend a limited amount of time at (maybe a month or two?). If you get a mortgage on a property in Paris for instance, You can rent out the property while not staying there but would you really want to deal with the hassle of lending your apartment out like a hotel and not knowing if you will make enough profit from temporary renters to be able to pay the mortgage on the property? Then there is maintenance and management -with fractional ownership this is taken care of.  There are so many interesting benefits to fractional ownership. To learn more about it, I asked Walid Halabi, owner of Paris Residence Club a few questions about the ins and outs of fractional ownership.Haya Zoubi: What exactly is "Fractional Ownership?"Walid Halabi: Fractional ownership is a relatively new concept that allows you to enjoy up to three months of home ownership privileges at a top-of-the-line, luxury property but at a fraction of the cost of whole ownership.

Fractionals (and Private Residence Clubs) offer you the opportunity to purchase a deeded share (usually 1/4 to 1/13) in a residence that gives you a certain number of weeks per year at the property and use of all amenities.

Since you’re essentially only paying for the time that you use, rather than owning the whole property and letting it sit vacant the majority of the time, fractional ownership is a much more cost effective way to vacation in the most desirable locations around the world.

Q: How does this work?A: Paris Residence Club, for example, offers 1/13 shares in their residences, providing each owner four unforgettable weeks yearly. Two of those weeks are what we call 'fixed,' or set calendar weeks which are concurrent (the first and second week of April, for example), forever. The other two weeks are 'fixed,' or flexible weeks that are available by reservation. PRC finds that the combination of these two provide the maximum of flexibility and stability that our owners expect.Q: How is Fractional Ownership different from timeshares?A: The differences are many. First, timeshares are typically for one to two weeks per year. Fractionals offer anywhere from two to thirteen weeks annually, and typically do not have to be consecutive. In addition, fractionals tend to appreciate since more of the buyers dollar goes toward high-quality finishes and "bricks and mortar," vs. sales commissions and marketing on timeshares, which in most cases can be as high or higher than 40% - 50%.

Furthermore, resales of timeshares have historically been poor due to the over-saturation of properties in the marketplace (and for the reason mentioned above). Conversely, there are a limited number of fractionals on the market. It is most likely that this will stay small due to the emphasis placed on building in only the very best, most desired locations.

Timeshares and fractionals differ greatly in cost. Fractional residences generally cost over $100,000 (as opposed to as low as a few thousand for timeshares). This difference reflects fractionals exclusivity, incredible services, superior locations and ability to appreciate.

Last but not least, with time share, you don’t normally own anything but the right to use a certain number of weeks per year, as opposed to fractional ownership, where you have a deeded interest in the property. As such, you are also in full control over maintenance and costs.

Q: In the current economic climate, how is fractional ownership beneficial to buyers?A: This climate is ideal for vacationers looking for their second (or third) vacation home. This is coupled with the 'green' movement, where saving is sensible. Fractional ownership offers the best of whole ownership, without the hassles that come with whole ownership (paying for something 365 days/year and only using four weeks yearly, for example). The annual taxes, insurance, utilities and maintenance are hard to justify in todays economic situation. Fractional owners only pay for the time they use.

Furthermore, with fractional ownership through Paris Residence Club, for example, thirteen families own one residence, as opposed to thirteen separate residences being utilized only 4 weeks out of 52. It just does not make any financial sense. Not only is it more cost-effective, it also cuts down unnecessary building waste.

Q: If someone can afford to buy a property with cash, is there any reason why they should partake in fractional ownership?A: I believe that for the reasons mentioned in #4 above, in addition to why, especially in todays market, would anyone consider whole ownership if they can achieve the same time and enjoyment for a fraction of the cost and upkeep? Once again, sensible is in, and that is why fractional ownership is the wave of the future for second-home ownership.Q: Is someone allowed to rent out their fraction to someone else if they will not be using it?A: That differs from fractional to fractional, but through Paris Residence Club, for example, our owners have the option to rent out if either they cannot use their time, or simply decide to go somewhere else and use the money from their rental to pay for their vacation. Our sister company, Paris Pied-à-Terre, is a vacation rental company that has been in the rental business in Paris for over ten years. Our owners simply list with us and we take care of the rest.Q: What often does ownership include exactly?A: Once again, that will differ from each development, but through Paris Residence Club, owners receive deeded rights to their property in perpetuity, along with an extensive list of amenities and services, normally lavished on guests at exclusive hotels: transfer to and from the airport; complimentary bottle of French wine and daily American newspaper; free calls to the States; full time concierge and gym membership, just to name a few.

In addition, members of The Club enjoy an extra fifth — or bonus, week that can be used at either The Club’s three-bedroom farmhouse in Provence, or our newly acquired 51’ sailing yacht in Marseille.

Q: Tell us about the "residence club"A: The Club is a new addition to Paris Residence Club, which offers the above mentioned fifth week annually. We currently have two properties, but as we expand our portfolio, more options will open up for the members. We are looking at properties globally.Q: How is the residence managed?A: Each association/residence will be managed by Paris Residence Club. The Club will offer general property management and repair services. The club will charge the association an annual fee for membership and participation and may also charge individual owners an additional fee for some of it’s services.Q: What are the possible risks in co-owning a property in a foreign country?A: To ease the fear of the unknown for our owners, Paris Residence Club has gone to great lengths to make this endeavor as simple as owning a residence in the States. Each fractional ownership apartment will be acquired via a “US home owners association”. Each share owner will be a member of this association with all rights and duties described in the association by-laws. Owners can sell, will or gift individual ownership interest at any time. Any sale, gift or passing following death will occur in the USA under USA law and will not require any legal proceedings or recordings in France. We have worked with U.S. attorney Andy Sirkin, who specializes in fractional ownership, to develop the legal framework. His website has extensive information on fractional ownership which you may want to read.Q: Tell us about some of the areas that you specialize in? Just in Paris or outside of Paris as well?A: I have actively and successfully been in the luxury apartment rental business in Paris for over 10 years. After seeing the success of fractional ownership in the States, and realizing a tremendous niche here in Paris, I decided to expand. Currently, I specialize in Paris properties, but The Club has properties in Provence and Marseille. After Paris, I'll start working on the South of France, most likely. We are listening to the owner's and client's feedback and constantly striving to exceed those needs, as well as provide unparalleled luxury and service. This will take us across the globe. Some other possible one-off urban developments in the near future: London, Rome, New York, Miami and Barcelona.http://www.parispiedaterre.comhttp://www.parisresidenceclub.com