Fancy A Taste Of The Millionaire Lifestyle?

May 26, 2009 by Fractional & Shared Ownership Property News & Reviews · 2 Comments

Then grab yourself a slice of the new property pie with Fractional Ownership

By Fiona Klonarides

Once upon a time in America, not that long ago, a new vacation property concept was born. It originated in Colorado and like many of life’s good ideas, it was simple. Instead of forking out a small fortune for a luxury ski lodge in Aspen, owners clubbed together to dramatically shrink their purchase costs. Each invested in a fraction of the lodge – say 25% – and because they actually owned their share (instead of just “renting” it) they reaped the benefits in more ways than one. Luxury properties they could only dream of holidaying in previously became theirs to enjoy at their leisure.

In the States the concept is already mainstream, but Europe has been slower to catch on, as mortgages for fractional properties have been harder to come by. But things are changing fast as top developers such as Taylor Woodrow España www.fractionalownershiptaylorwoodrow.com team up with organisations like The Fractional Ownership Consultancy who can provide financing through selected UK banks.

Les Milton, Chairman of The Fractional Ownership Consultancy commented: “FOC research has shown that holiday and second home owners often leave their properties vacant for the vast part of the year, as very few have the ability to take anything like 3 months holiday a year. Outright owners have to incur the full costs of upkeep and maintenance of their vacant holiday home, whereas with fractional ownership, owners can share those costs between them. The additional advantage is that those unused weeks can be put into a
rental program which can cover the cost of ownership altogether.”

Sarah Heywood, Managing Director of Tee2Green Investments www. tee2greeninvestments.com , agrees. “Fractionals are appealing for so many reasons. We specialise in golf properties in hotspots in Spain, Fuerteventura, Portugal, Miami and the Caribbean. Our fractional programme is fully regulated by the FMSA and underwritten by Lloyds of London, to protect the buyer, so even if property prices did fall, you would recoup what you paid for the share originally. “

The advantages are obvious. If you’re prepared to share ownership with other buyers, fractionals deliver more bang for your buck – and you own real bricks and mortar. You get the keys to your “des res” in the sunshine, without the headache-inducing bills that can come with sole ownership. Simply put, it’s the luxury lifestyle at a fraction of the cost.

Factor in low running costs and much lower purchase costs, coupled with possible capital appreciation and the opportunity to buy a bigger and better property in a more prestigious location, and you have an appealing formula for the more forward-thinking holiday home buyer.

Last year, the fractional lifestyle concept took off like a private jet, particularly in the States where it’s now the fastest-selling sector within the holiday home sales industry. Even the UK media, which can be cynical about such concepts, was buzzing with news about this new way to own the holiday home you really want, not the one squelched in to fit your wallet.

So instead of having to settle for a second line one-bed apartment in Murcia, buyers can help themselves to a slice of a more tempting property pie. Out with the generic one-bed apartment with no view; in with spacious 4-bed villa in Vilamoura, complete with luxuries of resort living, gardens, pool and golf. Goodbye to lounging in a crowded pool complex; hello to sunset margaritas that taste better sipped on a private terrace with sea views.

One example of how affordable fractional properties are is the new Aquapura resort in Portugal. The Fractional Ownership Consultancy www.fractional.net is currently marketing Aquapura’s 21 luxury apartments in the grounds of a 19th century manor house in Portugal’s famous wine-making region the Douro Valley. A quarter share entitles owners to the hotel amenities and 3 months’ usage spread across the year (and rental pool for unused weeks) and costs £112,500.

Richard Diaz, of FOC Sales & Marketing says: “Aquapura Hotel, Villas & Spa Douro Valley is certainly amongst the best hotels in the world and a top quality brand. Aquapura’s decision to develop this historic hotel to include villas that can be bought freehold as an appreciating asset, brings a life and a community to a beautiful part of Northern Portugal. Being able to buy into this luxury on a fractional freehold basis allows more people to enjoy a lifestyle that they might not have been able to afford.”

These are exciting times for the fractional industry. Sales in the States have risen by around 30%, according to some sources, year on year, since 2002. Comfortably pitched between traditional timeshare and destination clubs, and the other end of the spectrum – buying your own home – this might just be the property ownership model to sweeten the bitter taste of the credit crunch.

So could 2009 be the year fractional ownership takes off in Europe? Fractionals are a viable way to dip your toe into the property pool without jumping in lock, stock and barrel. This year, more than ever, all of us will need two weeks by a blue pool, under a warm blue sky, if only to escape from the grey skies clouding the global economy. Despite currency exchange fluctuations flights are still affordable and a couple of self-catering weeks with the family at your new luxurious, shared holiday home could be just what the doctor ordered.

Even the super-rich have fallen for fractionals and it seems the big boys appreciate the value of sharing. Expensive toys like yachts, jets, vineyards and art, which can make a fair dent in any millionaire’s budget, are just some of the big ticket items offered by companies such as Privatsea www.privatsea.com who specialise in yachts, private jets and a portfolio of premium residences. (Fractional aircraft ownership began in the mid eighties, so the concept isn’t new.)

Of course you’ll need champagne and fine wines to drink on your super yacht, so if you don’t have time to jet off to Tuscany or pick grapes in Provence, Wineshare www.wineshare.co.uk lets you buy your own rows of vines and then sit back and sip a variety of wines from five vineyards that you “own” in France, Italy and the UK. Your very own vintage “vat”, minus the VAT, delivered straight to your door, duty free.

Jets and vats aside, there’s a world of options out there for fractional lifestylers (for details, see www.fractionallife.com). From miniature poodles in Manhattan (popular with singles and elderly ladies happy to pay for the privilege of trotting their pooch down Park Avenue) to handbags and racehorses. Bored of the Bentley? Borrow a Ferrari for a day, or indulge the Jeremy Clarkson in you by test-driving a fleet of supercars of your choice with one of the elite car clubs like www.ecurie25.co.uk, which give members 40 days, or 4,500 miles to enjoy as they please at a fraction of the cost of owning your own dream car. “Less depreciation, more appreciation,” as one member put it. Or as another company www.marque2.com explains,
“a sports car when you want it, not when you don’t”.

Ditto your holiday home. Why buy a property you might only visit for a few weeks each year? Instead of sitting empty, a fractional holiday property gets used year round by the group of owners and can be rented out in their absence to generate extra income.

Some examples of fractional properties currently on the market from entry level to ultra-deluxe are a Trathan Properties development in Newquay, Cornwall, where the developer is selling off remaining luxury apartments by splitting them into 10 shares. For £34,950 owners get a five week spread across the year on a 99 year lease. City types snapped up the first apartments in the 30-home development for £300,000 each, but by creating shares in the remaining units, the developer has created fractional apartments so buyers get to enjoy the same amenities, including an indoor pool, sauna and gym in beautiful Cornwall at a fraction of the original selling price.

If city living is your thing, then a penthouse in Paris – a hot location – could be the answer. Fractional Paris www.fractionalparis.com have a selection of elegant, concierge serviced apartments. You’ll stay in style as membership perks include Mercedes car club membership, champagne, flowers and everything you could think of is taken care of for you, from babysitting to wine-tastings and personal shopping.

New UK company Botiga has some exquisite properties in their portfolio, but this is one for the big boys. Membership runs between £225,000 and £400,000 and buys 4-6 weeks vacation. Casa Birley, built by the late and legendary Annabel’s nightclub owner Mark Birley is just outside Marrakesh, the mansion can accommodate up to 18 people. Oozing with ambiance, surrounded by stunning gardens, it’s a seductive property in the same city that has charmed a stream of famous names including Yves St. Laurent, Mick Jagger and Richard Branson. French designer label Hermes and hotelier Rocco Forte are just two big names
developing seriously top end, multi-million pound resorts in the area.

But perhaps the most enterprising fractional ownership model of all is the true life tale, “The Necklace”. A few years ago, thirteen Californian women joined forces to buy a $37,000, 118- diamond necklace after one of them, Jonell McLain, saw it sparkling in a jeweller’s window. She couldn’t afford it, but had to have it. Several weeks and many phone calls later, she persuaded twelve friends to pitch in and buy four weeks’ use each year of the necklace which became a treasured symbol of their friendship.

Before buying, it’s worth checking the following:

• Verify ownership – ensure you have a right to the actual property/title deeds.

• When can you use your home, how many weeks are you entitled to? To keep things fair, low and high season weeks are often evenly distributed among owners but some schemes have fixed usage weeks.

• Rental pool. If you’re not using your holiday home, who will oversee the holiday lettings, and what sort of income will you receive, excluding any agent’s commissions.

• Do you have the right to all amenities on the resort, e.g. is golf included or are green fees and use of the spa extra?

• Is your property part of an exchange programme, i.e. can you swap your weeks in Portugal for a similar property in Cyprus?

• Can you sell your share at any time, are there any exit fees?

www.fractional.net
www.fractionalparis.com
www.fractionalownership-taylorwoodrow.com
www.tee2greeninvestments.com

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