What is fractional ownership?
Fractional ownership allows several unconnected investors to safely combine their resources with a low initial outlay to collectively own a luxury property
This is attractive for the following reasons:
- Traditional holiday property ownership may not be easily affordable.
- Any costs of ownership are shared.
- Fractional ownership offers a safe, legal and fair way to collectively buy a holiday property, share the title deeds, share income that is generated and the time which the property can be used
Owners are ‘tenants in common equal shares’
Where there are 13 memberships, every owner receives 4 weeks each per annum to use or lease back to the management company to generate income
- Usage bookings are taken annually each February. Any weeks that have not been reserved, will automatically be entered into the rental scheme.
- Memberships can be sold on at any time and members will directly benefit from the capital appreciation of the property.
The above can be described as:
- Fractional Ownership.
- Co-ownership of the title deed
- Share of the freehold title
Key Differences between Fractional Ownership and Timeshare Fractional ownership - each member owns a membership of a company which owns the bricks and mortar and owns the title deed. You benefit from any increase in value of your property when you sell, you benefit from rental income and from all capital appreciation.
Timeshare gives access to a property, the right to use it for a fixed time each annum. Although you are not the owner of the property, maintenance costs remain applicable
Summary of Benefits
- Own a luxury fully managed holiday property at a fraction of the price.
- Only a fraction of the financial commitment.
- Only pay for what you would like to use.
- Shared costs.
- Benefit from any capital appreciation.
- By inclusion in a Last Will and Testament, fractional purchases are an asset that can legally be transferred.
- A great way of creating a mixed portfolio, purchasing in different styles of properties in varied locations.
- Use, rent and sell – flexibility to make the very most of your property.
- Tax efficient way to buy, own and sell property