When considering investing in a vacation property, you should weigh the pros and cons of both timeshares and a popular new option called fractional ownership. What many people think of as a timeshare is actually fractional ownership.

The two differ in that with timeshares, you pay to stay in the home you share with other people and do not have any ownership of the property. With fractional ownership you actually own a percentage-along with a number of other people-of a home or condominium, including the cost of the home, taxes and maintenance.

According to a recent Bankrate.com article, an increasing number of Americans are choosing fractional ownership over timeshares because of the perceived advantages of owning a percentage of a vacation home. For instance with fractional ownership, you have more control of where you'd like to vacation. When you choose a timeshare, you may not have the choice of your perfect destination. Another benefit to fractional ownership is the possibility of earning equity with the appreciation of the property. Whether you are thinking about fractional owner in a Tuscan villa for a quarter of the year, or in a timeshare in Branson for a week, both options come with risks.

You may have read previous blog entries pertaining to fraud that occurs in the timeshare industry. Complaints of scams received by our office include timeshare companies that try to sell properties that don't exist. Or, they might lead you to believe that the property is in a more desirable location than it is; for instance, the company may promote the location is "seaside" or "oceanfront" when it is really miles from the beach.

There are disadvantages and risks to fractional ownership too. As with any ownership, you are in charge of maintenance, insurance, etc. With an unstable housing market, you may not be able to sell your part of the property. Finally, there are currently very few lenders who are willing to finance a fractional ownership. Bottom line: When considering either timesharing or fractional ownership, you should have a "buyer beware" mentality. And look at this as a luxury expense, rather than an investment. It is wise to investigate as much as possible and have an attorney review any contracts before you make a decision.