FOR many people, owning a foreign property would be the ultimate luxury. However, dealing with local authorities, maintaining the place, or renting it out can turn a luxury into a time-consuming, costly hassle. And that assumes you can really afford the place of your dreams, rather than a flat in a high-rise overlooking a crowded beach.
That is where the growing market for fractional – or shared ownership – properties has come in. Originally an idea popular in America, fractional buying allows you to purchase a portion of a property (usually between a quarter and an eighth) in a luxury resort, for which you can stay for a set period per year – between three and six weeks is normal. Allocations for owners will be spread across the year with, say, each allowed two weeks in high season, two in mid season and two in low season.
“Which weeks you go for is on a first come first served basis, and a good resort would try to accommodate you in an identical property if there’s a clash,” says Nick Turner of The Registry Collection, one of the largest operators. Bookings are made through resorts, so there’s no need to negotiate with fellow owners.
Fractional buying is often compared to timeshare ownership, but differs in that you buy a freehold share of the property, rather than units of time. As the property value rises, so does your share. Tax and legal fees will usually be included in the price, with everything handled by the fractional company – but it’s worth checking to avoid being surprised by extra costs.
It’s a nifty way of enjoying a luxurious foreign pad without having to stump up millions, and there are other perks. Resorts offering fractional properties will also manage them, meaning you just have to turn up on your agreed dates. The Registry Collection, with 200 affiliated resorts worldwide, also offers reciprocal deals for properties in other locations, so if you fancy something different you can swap a week or two of your allotted time at your property to head elsewhere.
Some companies, like Rocksure Properties or The Hideaways Club, have taken the model further. They offer investment in funds that buy up luxury homes around the world, which shareholders can arrange to stay in. Having launched two funds for ultra-high-end villas in places such as Thailand, Colorado, Morocco and Brazil, Rocksure has just launched a Capital Fund for deluxe properties in major European cities (see above), appealing to those who prefer cultural trips and weekend breaks to lounging on white sands.
Following the devastation of the holiday homes market in the recession, the fledgling fractional market is now particularly affordable. While fractional ownership won’t guarantee huge returns, it nevertheless has the potential for capital appreciation with minimal risk. Buyers do have to pay local tax on capital gains made, though unless you get very lucky, this won’t be a very substantial sum.
“The recession has created an opportunity for the fractional market,” says Paul Owen, chief executive of the Association of International Property Professionals. “It’s in its infancy for British buyers, but in five years time it might be seen to have been introduced at the right time.”
Bravo fund from £189,000, Capital Fund from £100,000
Rocksure Property’s Bravo Fund owns six properties around the globe that shareholders can stay in for four weeks each year. Destinations include Thailand, Morocco, Portugal (pictured), Croatia, Colorado and Brazil, with four and five bedroom homes averaging over £1m in value each. The life of the fund is seven years, at which point the properties are sold on and investors paid. Rocksure’s newly-launched Capital Fund is offering 14 nights a year in townhouses in European cities such as Paris, Cannes, Venice, Florence, Vienna and Barcelona. The life of this fund is 10 years.
For more information visit www.rocksureproperty.com.
ARCOS GARDENS, ANDALUCIA
The investment affords buyers an eighth of a four bedroom villa at this golf resort in the rolling hills of Andalucia, which can be used for four weeks every year. At the heart of the 440 acre estate is a smart hotel in a 17th century building, as well as a championship-level golf course with a brand new club house and a day spa. You can enjoy all these facilities along with the Registry Collection’s 24-hour concierge service – and you even get a set of top quality golf clubs thrown in.
For more information visit www.theregistrycollection.com.
CASTELLO DI CASOLE, TUSCANY
Castello di Casole is a rather splendid resort based around restorations and reconstructions of traditional Tuscan farmhouse villas on a historic 4,200 acre estate 20 minutes west of Sienna. Think hand-built loggias, terracotta vaulted ceilings, wood-burning ovens and rustic, ancient brickwork mixed with some distinctly modern luxuries like infinity-edge swimming pools and swish designer bathrooms. Villas are for sale for full ownership, with a starting price of €3.7m. Alternatively, a basic €290,000 fractional investment buys you a twelfth of a property and three weeks’ holiday there per year, plus the option to stay for free on a space available/short notice basis.
For more information visit www.castellodicasole.com, or contact Aylesford International on 020 7349 5100.
EROS VILLAS AT EDEN ROCK, ST BARTS
Eden Rock on the Caribbean island of St Barts is one of the most exclusive and beautifully-appointed hotel resorts in the world. It also has a number of the kind of villas that would cost several million dollars to buy outright, but which are instead available on a fractional basis. In a resort perched dramatically on top of a tiny rock peninsula, you can get glorious private sun decks with spa pools, opulence of the most chic kind, access to shimmering white beaches, plus all the luxuries of the hotel itself, including restaurants, gym, boats and even a full-on recording studio. The investment gives buyers the right to stay for between four and five weeks per year.
For more information visit www.edenrockestates.com.