Spanish Property Crash Sparks Revival of Fractional Ownership
In the mid-late 2000s, many estate agents started peddling fractional ownership as a way to widen their potential customer base – it didn’t catch on. Now, in the wake of boom turning to bust, fractional ownership is enjoying a revival.
Nick Stuart, Director of Spanish Ownershare, a concept wholly owned by respected estate agent Spanish Hot Properties, explains, “Fractional ownership has been big in the US for decades, it now works well in Greece and Portugal, but Spain has stuttered – largely because those estate agents in the mid-late 2000s over-inflated prices and scared buyers away. Now, as wallets tighten, Spanish property prices fall and the pound strengthens, we have the perfect environment to resurrect fractional ownership in a transparent, inexpensive manner. Spanish Ownershare fits the mood of the moment.”
Leaving pure financials aside, fractional ownership makes good sense. Some research shows the average second home is only used between ten and 17 days per year, others say a maximum of 40 days a year, whichever is true, it seems futile to bear the costs attached to owning a home for 365 days each year. With Spanish Ownershare clients have 84 days available to them but pay just a fraction of the cost of outright ownership. This means they can afford to buy a far nicer property than would ever be possible if footing the entire bill.
Nick continues, “Basically we’re matching people’s spending power to their expected use of a holiday home. With prices from as little as 55,000 euros for a share of a two bedroom two bathroom apartment, those who never thought they would be able to afford an overseas property now have one right in their reach. Likewise the annual running costs of the property are also divvied up amongst the owners so ongoing annual fees are kept to a minimum. A real bonus is if you are that “average” person, the one who only uses their second home somewhere between ten and 40 days a year, you can rent it out for the remainder. Spanish Ownershare is a hardworking investment.”
The obvious rival to fractional ownership is (whisper it) timeshare, but it’s impossible to make it stack up as a viable alternative. A quick internet browse highlights an advert for four weeks per year “platinum season” in a one bedroom apartment on a popular Costa del Sol timeshare resort for 79,000 euros. Spanish Ownershare can give three times that, 12 weeks (and an extra bedroom) for just 55,000 euros. And what of its resale value? A fraction is an asset that can go up (or down) in value and be sold at a profit. On the other hand the market is flooded with cheap, and free, timeshare resales as owners struggle to even give them away.
With Spanish Ownershare a UK limited company is set up to buy the freehold property and then buyers take a quarter share of that company therefore becoming equal equity owners of the property. Participants complete a questionnaire to assess eligibility and suitability and the entire purchase process is 100% safe and secure. The share can be handed down to family members, left in a will or sold on the open market with the seller benefitting from any profit.
Properties are bought at the qcsed best possible price as they are either bank repossessions or distressed, and the price clients pay includes all purchase costs and brand new furnishings. Annual costs are the relevant percentage of community fees plus payment to a management company to handle cleaning, handovers and maintenance. The 12 weeks are allocated on a rotating basis and evened out over a four year period such that by the end each owner will have used the property for every month of the year. Week swaps are permitted, via the management company, as are private rentals.
Spanish Ownershare example: Well located two bedroom two bathroom apartment with on-site facilities, including swimming pools, all set in tropical landscaped gardens. The property is modern in style with cream marble flooring as well as a stylish fitted kitchen. Situated next to a golf course, the apartment is within reach of shops, restaurants and the beach in less than five minutes and Málaga Airport in 40 minutes. Price – 55,000 euros for a quarter share including buying costs and furnishing.
Contact Spanish Ownershare on Ownershare@spanishhotproperties.com call UK 00 44 207 558 8355 or Spain 00 34 952 864 382 or visit www.spanishhotproperties.com.