Mark Sharp,the Chief Executive of the Association of International Property Professionals recently said that whole ownership “will become a luxury” in the overseas property market. The reasons for this are the increasing price of property and at the present time as it is a bear market buyers are uncertain about commmitting hard earned funds particularly if they are not able to sell their properties at home.
The simplest form of fractional owership is when buyers purchase a property as tenants in common and each person gets a share in the property.This means that on death each buyer’s share goes into their estate. It also means each person can deal with their share in the property e.g sell, provided there are no agreed restrictions to the contrary.
A more sophisticated form of fractional ownership is where the property is purchased by a Trust Company and held in Trust for the purchasers. The purchasers do not have a legal estate in the property but they have a beneficial interest. This is often done with vacational properties.
A third more complex structure is where the property is owned by a company and the Trust Company then holds shares in Trust for the buyers. Under this scheme the buyers do not get beneficial ownership but if for example they are buying a holiday home in a development they may then be offered the equivalent of a time share in the property commensurate with their investment.
The benefits of fractional ownership are
1) smaller investment at the outset
2)shared costs and expenses
3) if buying in a development the buyer may be able to put the property in a rental pool when not using the property.
4)The buyer can purchase a fractional share in a better quality property than if purchasing the property outright
5) This form of ownersip makes more economic sense for buyers unable to spend a lot of time overseas maybe because they are still working.
In the New Year Safe Haven Real Estate will be launching such a project in a stunning development which has won many accolades including from National Geographic. The Development is perched on a hilltop above the Caribbean Sea and is also next to a river. All of the villas and bungalows are tucked into the natural landscape.
Buyers will be able to put the property into a rental pool so that they can benefit from the property all year round.
