Fractional Ownership is a growing, successful concept, but few people really understand exactly what it means, or the benefits it can give, says Michael Hobbs from Appassionata.
It is frequently confused with timeshare, conjuring up a negative view of being chased down the street in Marbella by an over-enthusiastic salesman inviting you to enjoy a liquid lunch and sign on the dotted line. Fractional Ownership is not Timeshare. It has some similarities, in that it involves a number of people sharing in the use of a single property, but the similarity ends there.
Fractional Ownership was developed to create a more secure and reliable solution for those wanting to share ownership of a luxurious item. Property, aeroplanes and boats are the most popular, where the share of ownership is generally between a twelfth and a quarter. The key to Fractional Ownership is ‘ownership’: you own a share of the property in perpetuity, with the right to sell at any time. Timeshare is all about ‘time’, you have the right to use the property for a short period each year, normally a week, but without ownership in the freehold asset. Timeshare is likely to reduce in value over time.
Appassionata have undertaken several re-sales on behalf of owners, achieving an average return of more than 12 percent on the total value of shares sold, a real success in what has been a difficult international property market.
With Fractional Ownership several buyers collectively own a luxury property, professionally managed and maintained throughout the year, and split the annual running costs between them. Financially this makes good sense. On average, a holiday home owner only uses their property for 40 days each year, but has to pay for the entire year.
Our owners are all pretty savvy. They often have the resources to buy a property outright, but don’t want the financial burden and stress. They know they haven’t got the free time to use it all year. They don’t want the headache of paying for the upkeep and maintenance of year-round ownership. Some have owned holiday homes before and were fed up of having to maintain the house, cut the grass, clean the pool and fire up the central heating before they have had a chance to kick back, crack open a bottle of wine and enjoy ‘being’ in their holiday home.
With Fractional Ownership you arrive and everything is ready for you to start your holiday immediately, providing a modern solution to owning a holiday home. It’s much better having a group of people share in the cost of ownership and for the house to be fully used throughout the year. It breathes more life into local communities, adding to the rich culture and diversity of the local area by developing long-term relationships with the community. It really gives you the chance to explore and experience a beautiful part of the world on a recurring basis.
Fractional Ownership is not for everyone, of course. If you are planning to live somewhere permanently or spend more than six months of the year in the same place, there are perhaps better solutions for you. However, if you want a holiday home, or a home where you can experience the local area before deciding on an outright purchase, or you want to buy into a more luxurious property than you could otherwise afford, Fractional Ownership is an option you should definitely be considering.
It is a given that the legal structure for Fractional Ownership must be robust. Buying into a Fractional Ownership scheme must be easy and straightforward. The legal structure must protect the owners, the property, and provide a simple, transparent way for the property to be managed. The Appassionata structure is simple, secure, tried and tested. With Appassionata you own a tenth share of the property, which you can sell at any time. The property is owned by a UK company where you are a ten percent shareholder. You have exclusive use of the house during your five weeks of annual residency.
To experience the quality of our Fractional Ownership properties or to ask for more information, please get in touch with Appassionata and we can arrange a discovery visit to Le Marche.
“The expense of buying a holiday home outright, along with the annual running costs, seems crazy when you only use the house for an average of 40 nights a year. That is why Appassionata was born!”
The Sunday Times
For more advice, go to www.appassionata.com or email Michael and the team directly: info@appassionata.com