What Is Fractional Ownership

Fractional ownership can apply to anything: cars, yachts, even designer handbags. But sharing possession of a holiday home, popular in the US for years, is finally taking off over here.

In brief, fractional ownership gives a buyer ownership and use of a property for an agreed number of weeks each year to enjoy themselves, or rent out for profit.

We developed fractional freehold options to meet the wishes of those who would love to buy their dream home abroad but feel more comfortable with a lower capital outlay. Fractional ownership also gives cautious buyers the option to test ownership abroad.

Surveys have shown that the majority of second home owners only use their properties for approximately eight weeks per year which sometimes makes it difficult to justify the investment of an outright property.

Especially in the current market, fractional freehold offers people a way of buying a top-quality dream home in the sun at a portion of the cost.

No, not timeshare

In a fractional ownership deal buyers always have equity in the bricks and mortar they initially invested in.

The simplest way to explain fractional freehold is that a group of people,  but usually unknown to each other owns a property; they share the investment cost, the running cost and the usage of the property in a controlled and managed way.

How does the ownership work?

Each owner has full ownership rights for the period they own in perpetuity, which includes selling or renting to others, as well as the option of upgrading to buy a property outright or a larger fractional property. However, there are a few rules that needs to be followed but these are all clearly explained in the contract.

Different schemes are available and the availability of these varies between Pocomed's resorts, offering one, two or three month's use of the property per year in perpetuity.

Some fractional ownership deals operate very simply. Owners are at liberty to sell their share whenever they want, either through the management company, or a local estate agent, or pass it on when they die in the same way as they would in an entire property.

The number of owners can vary, however the fewer the owners, the higher the price, but the more access to a property the owners will be allowed.

Finance

Mortgages as we know are becoming increasingly more difficult to find. However, in Spain with many of the new developments there are builder's mortgages available. These tend to be less complicated  to set up as the developer has a prior agreement with the banks for purchasers to take over the mortgages on the property.

With fractional ownership it means that the deposit shared between the parties becomes less of a burden to fund.

Fractional freehold has opened up the second home property ownership market to a much wider audience that would previously not have considered the idea of buying abroad.

Our owners are varied and include families, couples, people still working, retired - really anyone who sees the sense in buying what they actually need and perhaps enjoying a better, larger property more luxurious  than they might not otherwise have been able to afford if they bought an outright property.

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