Fractional Ownership explained
Fractional Ownership - The Smart Way to Invest In a Holiday Home
Are you dreaming of owning a holiday home in France or Spain? The reality is that for most of us, this is an expensive and challenging investment. However, with fractional ownership, you can purchase part ownership of a property and enjoy all the benefits of a luxury home without the costs. Let’s explore why fractional ownership makes so much sense today.
Pay A Fraction Of The Price For A Premium Property
Why should you pay 100% for a second home that you will use part-time? The average use of second homes in Europe is 40 days a year. It would make sense for your main home, where you or your loved ones stay for most of the year but for a holiday home, the conclusion is entirely different.
When you buy a holiday home outright, you pay the full price for it. With fractional ownership, you only pay for the portion you own; the upfront cost is significantly lower. You can also benefit from paying no VAT or Stamp Duty on your share as you would with an outright purchase. In other words, fractional ownership allows you to access more premium properties at a fraction of the cost.
Fractional ownership started for private jets and yachts...
The concept began with luxury assets so costly that buying fractional shares became the rational choice, allowing people to enjoy exclusive properties without paying the full price for something they would only use occasionally. This approach soon extended to exotic vehicles like supercars, where enthusiasts could access top-tier Lamborghinis and similar models as fractional owners, sharing the enjoyment while avoiding the steep insurance and maintenance expenses that come with full ownership.
Fractional Ownership Second Homes vs Timeshare
Fractional ownership allows several owners to share ownership of a property, with each owner holding a deeded interest, unlike timeshare, where you only “own” time.
With Timeshare, there can be as many as 52 owners of the same property (crazy, no?) when, with fractional ownership, there are on average 5 owners (property is usually divided into 8 parts, but some owners have more than one part).
Also, the value of the share is tied to market trends and you can sell your ownership share(s) at a profit when the market goes up. Timeshares are known to be very complicated to sell and you often lose money.
Renovation And Furniture Upgrade Included In Share Price
Don’t break your back! For many of our fractional ownership properties, the share price that you pay will also include renovation and furniture upgrades of the property. This means that when you buy into a property with fractional ownership, it will be ready to move into without any additional costs needed for renovation or furniture upgrades. This makes fractional ownership an even more attractive option than buying the entire property yourself. Imagine having to deal with renovations, furniture upgrades not to mention the extra cost.
Split The Running Costs, Maintenance And Taxes
Fractional owners typically all share the running costs such as maintenance and taxes on the shared property. This makes it easier for everyone involved because no one person has to bear all of the costs associated with owning that holiday home. With increased utlitity prices and other inflation-related costs, it does make perfect sense.
Additionally, since each owner only owns a portion of the property rather than all of it, the financial burden is spread out amongst several people which makes it much easier to manage financially.
Foreign owners in France or Spain (and in most parts of the world) can use their second home for up to 6 months a year, unless they decide to become tax residents there (see more here).
For British clients, now that the UK is not part of the EU, it gets even worse. British owners of foreign second homes in the EU can stay for a maximum of 90 days in any 180-day period. And it is not just for your second home stays, it counts towards any trip you make anywhere in the EU during that year. Fractional ownership is perfect for your second home, as you only pay for what you can use! Only one part purchased (equal to an eighth of the property) gives you 1.5 months/year already. You can buy up to four parts, meaning you can stay up to six months a year in your Ibiza villa for example.
Fully-Managed Property Management
Fractionally owned properties are usually managed by professional companies that handle everything from hiring staff to ensuring bills are paid on time and that all maintenance tasks are completed promptly and adequately.
This gives owners peace of mind knowing that their investment is being well looked after while they are away from their holiday home or not using it as often as they would like due to work commitments, etc. It also means that owners don’t have to worry about managing tenant requests or dealing with any problems that may arise during their absence from their holiday home – something which could be highly stressful if they owned the entire property on their own!
The Benefits of Buying a Holiday Property Without Breaking the Bank
Fractional ownership offers buyers many advantages over buying traditional second homes outright; lower cost, no hassle property management services and rental income opportunities make it an attractive option for those looking for affordable luxury living abroad.
Fractional ownership is a compelling alternative to traditional second-home investment, giving buyers affordable access to luxury property for a fraction of the price of sole ownership. With shared costs and professionally managed properties, you enjoy none of the hassle or ongoing management responsibilities typically associated with owning abroad.
All maintenance, guest services, and even furnishings or renovations are taken care of, and the ability to rent out your unused time delivers effortless rental income. This makes fractional ownership the ideal solution for anyone seeking premium real estate in France or beyond, without breaking the bank or dealing with the daily worries of property management. Discover more advantages and opportunities by visiting co-ownership-property.com.
