Fractional Ownership
Fractional ownership originated in the U.S.A. in the 1980's, initially in the private jet market. It was soon extended into luxury yachts, and shortly thereafter into the leisure property market. Fractional ownership has been the fastest growing sector in the property markets in both the U.S.A. and Europe in the last 3 years.It is a shared view of the local industry leaders that Fractional ownership will be the fastest growing sector of the S.A. property market in the next 3 years.
Why the phenomenal growth?
With property prices having achieved massive growth in the last 5 years, owning a second home for holiday usage has become unaffordable for many. Furthermore, many affluent investors who could afford a holiday home, are realising that it is not financially prudent to invest the type of funds required both upfront, and for ongoing expenses, for an asset that is only used for a few weeks a year!
Benefits of Fractional Ownership
- Nobody makes use of a holiday home for more than a few weeks a year. Fractional ownership offers you the perfect solution - only pay for what you use.
- It offers more affordable ownership in exclusive leisure destinations as costs are shared.
- For the price of 1 holiday home, you could invest into a whole portfolio of Fractional properties, giving you more holiday choices, as well as diversifying your property portfolio.
- Leisure destinations, because of demand, increase in value much faster than your average residential properties.
- You don"t have the sole burden and heavy ongoing costs involved in maintaining and managing the property, as the costs are shared between all shareholders, and the maintenance and management is taken care of for you.
- Limited security concerns as a result of maximum usage and higher occupancy, and secure estates/developments.
- You can earn rental income by renting out your non utilized weeks.
- You can exchange all or part of your annual usage into hundreds of luxury affiliated resorts worldwide.
- You can sell your share in the property at any stage.
- You have a share in property which is a capital growth investment.
- All in all you will experience Suite Satisfraction!
What is Fractional ownership?
Fractional ownership ( Managed property syndication) is a method of co-owning a single asset by more than one individual or entity - a group of investors.It is a legal entity through which a number of investors become shareholders (owners) of a luxury leisure asset(ie. holiday home). The costs and usage of the property is shared amongst the shareholders in relation to the percentage shareholding.The shareholders are the owners of the property, and therefore control all aspects of the property through a private company. The company allows shareholders time periods to enjoy personal usage of the property by means of a shareholders agreement.
eg. the most common structure is 13 shareholders( 8%) offering each shareholder 4 weeks usage per annum.
This investment method offers the most favourable and optimal combination of leisure lifestyle, investment, and property ownership, by offering a share in an appreciating asset at a fraction of the cost - without the burden of management and maintenance. All in all Suite Satisfraction!
Is it similar to Time share?
The only similarity is that more than one party is involved in the property, and usage is determined by a usage agreement... however the advantages of Fractional ownership over timeshare are distinct and far more superior.
- Timeshare buys you time; Fractional ownership buys you an appreciating asset.
- Timeshare generally decreases in value, while Fractional shares increase as the property value increases.
- With timeshare especially the points clubs, availability is a serious concern, as demand is higher than supply.
What do i get?
You receive a % share in a leisure property and appreciating asset...
- In an exclusive holiday destination
- That increases in value more than the average residential property
- That gives you a real right in the property and control thereof
- That gives you a usage right as per the usage roster
- That is a fully tradable right with a share certificate
- Suite Satisfraction
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