Date: February 12th 2010 -
Publication:"City
a.m." - Title:
"Get
into the foreign property game at a fraction
of the cost."
Author:Tomothy
Barber
Get
into the foreign property game at a fraction of the cost.
By
Timothy Barber
Published:
Friday February 12th 2010
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.
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.
Some companies, like Rocksure Property, 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.”
ROCKSURE PROPERTY
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
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