Tips for Transferring or Selling Your Fractional Ownership Share

11 Tips for Transferring or Selling Your Fractional Ownership Share

Owning a fractional jet share offers the luxury and convenience of private aviation without the full costs of owning an entire aircraft. However, there might come a time when you need to sell or transfer your share.

Whether your travel needs have changed or you’re ready to explore other options like jet card programs or chartering, the process of selling your fractional jet ownership share requires careful planning.

Here’s a straightforward guide to help you navigate the sale or transfer process with confidence.

1. Understand Your Fractional Ownership Agreement

Before you begin the process, review your fractional ownership agreement. This document outlines the terms for transferring or selling your share. Pay close attention to clauses like the right of first refusal, which may require you to offer your share to the fractional company or other fractional owners before selling to an outside buyer.

Some agreements also detail remarketing fees, which are fees charged by the management company to assist with selling your share. These fees can vary depending on the fractional ownership program, so it’s essential to know what to expect.

2. Notify Your Management Company

Let your management company know you intend to sell your fractional jet share. They play a crucial role in this process and can provide guidance. Most fractional programs have established procedures for selling shares, and the management company may even have a list of interested buyers.

Ask them about:

• The resale process for your fractional ownership program.
• Any associated costs, such as remarketing fees or administrative charges.
• The timeline for completing the sale.

This initial conversation will give you a clear idea of the steps involved.

3. Determine the Market Value of Your Share

The resale value of your fractional aircraft share depends on several factors, including:

• The type and age of the aircraft.
• The remaining flight hours or unused hours on your share.
• The overall condition of the jet and its maintenance history.
• The demand for your specific aircraft in the market.

It’s common for the resale value to be lower than your initial investment, as depreciation is a key factor in aviation. Work with your fractional provider or an independent broker to get a realistic estimate of your share’s worth.

4. Factor in Costs and Fees

Selling your fractional jet ownership share isn’t free of cost. Be prepared for potential fees, which may include:

• Remarketing Fees: A percentage of the sale price, typically charged by the fractional company for facilitating the sale.
• Administrative Fees: Covers the cost of processing paperwork and updating ownership records.
• Ongoing Fees: You are responsible for any monthly management fees, fuel surcharges, or other ongoing maintenance costs until the sale is complete.

Knowing these costs upfront helps you avoid surprises during the process.

5. Explore the Secondary Market

While your management company is a valuable resource, you can also explore the secondary market for selling your share. Brokers and platforms that specialize in fractional jet shares can connect you with potential buyers. These professionals understand the market and can help position your share competitively.

Using a broker can also be helpful if your fractional provider has limited resources for assisting with sales. Ensure you choose a reputable broker with experience in shared ownership transactions.

6. Prepare All Necessary Documentation

Selling your fractional share requires comprehensive documentation. Be ready to provide:

• The purchase agreement from when you acquired the share.
• Maintenance records for the shared aircraft.
• Details of your remaining flight hours or unused hours.
• Copies of agreements related to the management company and your fractional ownership program.

Having all paperwork organized will streamline the sale process and make your share more appealing to buyers.

7. Understand Buyer Requirements

Potential buyers for fractional jet ownership shares are often high-net-worth individuals or businesses. They will likely conduct due diligence on:

• The condition of the fractional aircraft.
• The costs associated with ownership, include monthly management fees, operating costs, and fuel surcharges.
• The management company’s reputation and ability to provide guaranteed availability.

Be prepared to answer questions about the share and provide transparency about the aircraft’s history and the terms of your fractional ownership program.

8. Consider the Timing of the Sale

The timing of your sale can impact the value of your share. For instance:

Shares for newer aircraft types or multiple aircraft fleets may be in higher demand, leading to better resale values.

Selling during periods of high demand for private air travel, such as holidays or peak travel seasons, can make your share more attractive to buyers. Planning your sale strategically can help you maximize your return.

9. Negotiate with Potential Buyers

Once you’ve found interested buyers, negotiate the terms of the sale. Key factors to discuss include:

• The final sale price, is based on the market value and any remaining flight hours.
• Any additional fees or costs to be covered by the buyer.
• The timeline for transferring ownership.

Being flexible and transparent during negotiations can help you close the deal quickly.

10. Finalize the Sale

After agreeing on terms, work with your management company and legal advisors to complete the transaction. This includes:

• Signing transfer agreements to update the ownership records.
• Ensuring the buyer understands their obligations under the management agreement.
• Confirming all outstanding fees are settled before the transfer.

Once everything is finalized, the buyer will assume all responsibilities for the fractional aircraft share.

11. Post-Sale Considerations

After selling your share, consider your next steps in private aviation. Options include:

• Jet Cards: A flexible alternative for flying privately without the long-term commitment of ownership.
• Charter Flights: Ideal for occasional travelers who prefer to pay per trip.
• Full Aircraft Ownership: For those who want complete control and can handle the high costs of owning a single aircraft.

Evaluate your travel needs and explore the options that align with your lifestyle.

Key Takeaways for Selling Your Fractional Jet Ownership Share

Selling your fractional jet share can be a straightforward process with the right preparation. By following these steps, you can navigate the sale efficiently:

1. Understand your agreement and its terms for resale.
2. Work closely with your management company or a reputable broker.
3. Prepare detailed documentation to attract buyers.
4. Factor in all associated costs, including fees for remarketing and administration.
5. Time your sale strategically to maximize value.

Whether you’re transitioning to full ownership, exploring jet card programs, or moving away from fractional ownership, a well-executed sale ensures you get the best value for your share. With a clear plan and professional support, you can complete the sale confidently and move on to your next aviation journey.

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