How does Fractional ownership work?
Fractional ownership refers to the legal sharing of a property with multiple owners. The property title is divided in a manner that each owner has an individual freehold title. This title can then be mortgaged or sold without affecting or needing approval from other owners. Fractional investment in property allows the shared owner to use the property for a set number of weeks per year on a rotating basis.
It is a method that was inspired from the Aircraft industry where sharing ownership of an airplane is a better idea than completely owning one, giving you the flexibility to draw tax benefits as well as deferring long term associated costs.
The growing popularity of fractional ownership and research in the property market suggests that fractional investments are a lifestyle decision rather than a traditional property investment. These such ownerships might have a high potential of high appreciation and positive outlook on cash flow.
With fractional investment one can easily purchase a property and allocate the shares between the investor based on the percentage of investment e.g. If 4 people purchase a property for £1,000,000 then each investor would be a quarter owner (25%), having a share of £250k each. The buyer can fully enjoy the right of part ownership this way with their name mentioned on the structure and share certificate of the property. At Kingsland Estates we provide a comprehensive service to help you make a sound fractional investment, one that will perfectly suit your lifestyle and investment needs and one that will really make it possible to buy luxury property.
What are the risks of fractional investment?
The fast developing market for fractional ownership draws its strength from the aspiring investors, limiting their capital risk especially by investing in luxury properties. The concept however is still new for Europe and especially in Britain where the market at large remains unregulated. Buyers should be even more cautious if the fractional ‘investment’ is presented by a company whose products are unregulated by the Financial Services Authority in the UK or equivalent worldwide.
It is also worth mentioning that fractional investment by a United Kingdom national cannot be included as part of a Self-Invested Pension Plan (SIPP). This is where Kingsland Estates can help. Our team have extensive knowledge of the property market. Our experts will eliminate all the risk out of investing in a fractional investment, meaning you can fulfil your dreams and buy luxury property.
What are the benefits of fractional ownership?
There is more to having a luxurious property than just money. The fractional units are used by buyers as perks for their business clients, as a family getaway or the locations can be traded for one’s share of time in an exotic location anywhere in the world.
For some people, fractional investment makes a lot of sense as the key to success to this trade is “Timing”. If one has done it just right it would end up giving you a potential profit in future sales, providing the pleasures of luxury in all the time you owned it. Kingsland Estates know the market inside out. We will help you to find the best fractional investment for you, one that will suit your lifestyle and bring in a potential profit. We take all the risk out of the investment by ensuring all the agents are fully vetted and legitimate, making the process hassle free for you and much more secure.
