3. Fractional ownership
A fraction of the cost
N
ICK VAN GRUISEN, managing director of the Ultimate Travel Company, knows
an awful lot about holidays, and swore blind he wouldn' t buy overseas. ` I always said I' d never buy a property abroad. You constantly feel you have to go thereÐ it' s less about the financial strain and more about the mental strain. You' re emotionally tied to itÐ I'd always rented and walked away afterwards.' However, hearing about a new fractional-
Left Owning a home abroad can give you the chance to truly relax. Above and below Chalet owners and long-time friends Simon, Ben, Chris and Stephen can enjoy their Alpine home at any time of the year
2. Buying with friends
Buy to share
H
AVING met at university, Simon, Ben, Chris and Stephen, plus two others,
decided to club together to buy a ski chalet in 2004. ` It wasn' t for profitÐ we just wanted to do something together, and we were all keen skiers so it seemed like a good plan to buy a ski property,' explains Simon. The group had fun on some fact-finding missions to and from various areas, but, according to Chris, decided to go for a good, spacious property they could enjoy in a lesser-known but traditional French resort rather than a small flat somewhere more fashionable. Finally, they bought a chalet off-plan that sleeps 8± 10 in Les Carroz, near Flaine. They all use the house and, having con-
ceived it as a place for groups of friends, they now take their families, too. They also rent the property out, which partly covers the mortgage interest and property running costs. Their website (
www.flameski.com) attracts most of their guests through a sponsored link on Google. Each friend had different skills to bring to the project: Simon speaks fluent French, Chris takes most of the bookings, Stephen designed the website and Ben has a good head for figures. They have a man who lives in the village and manages the property for them to make sure everything' s shipshape, and they' re proud of what they' ve achieved. The other advantages are that the investment risk is lessened: ` Spread
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between six, you don' t feel as exposed as if you took on a large mortgage by yourself,' says Ben. ` Plus, with a significant investment, you' d feel you always had to go there on holiday, whereas we do spend time there, but we ski and holiday elsewhere as well.' The other advantage is that you know who
you' re dealing with, as Chris points out: ` We' ve known each other for so long, we can rely on each other not to do something harmful to the rest of us. We' re as far removed from anony- mous property clubs as you can imagine.'
Joint ownership
Pros
s You buy with people you know and like s You spread the burden of responsibility for buying and managing the property,
as well as the financial risk s You don' t feel you have to spend all your holidays there
Cons
s Too many cooks can spoil the broth, and you have to trust each other com-
pletely or friendships could be at risk s Capital appreciation is spread s You can' t come and go as you please Ð particularly if you' re renting it out
ownership scheme turned his head. Rock- sure has fixed-term plans where members invest in a portfolio of properties all over the worldÐ in this case, six houses, in the Rocky Mountains, Brazil, Thailand, Morocco, the Algarve and CroatiaÐ with the advan- tage that the investment is spread across many different currencies, a form of spread betting, if you like. The scheme lasts seven years, during which each member has an average of four weeks' holiday in the prop- erties of their choice, and, at the end of a fixed term, the capital appreciation of the portfolio is shared out. ` I didn' t want a time share and I didn' t want to get stuck in a property club I wasn' t sure I could get out of easily,' explains Mr Van Gruisen. ` A lot of these clubs are one-in, one-out.
` What Rocksure was offering had a fixed
term of seven years, after which we sell the properties and split the profits between us. We used our weeks, as well as donating them to charity auctions and giving them awayÐ whatever suited us at the time.' You also don' t have the responsibility of looking after your own houseÐ properties are managed and
NEED TO KNOW
The details of fractional ownership
Fractional-ownership schemes, some- times called private-residence clubs or destination clubs, work on different models. Some, such as Rocksure, offer a fixed-term investment over seven years, but other clubs are more open-ended, giving access to a larger number of properties over a longer time period. Safe Haven takes a differ- ent approach: it buys luxury homes around the world for its members to stay in and then balances its portfolio with UK-based rental properties. The net income from rental properties will make a big contribution to the club' s running costs. Whatever the choice, always make sure you' re buying equity in the properties rather than just invest- ing in a holiday club or a time-share.
Country Life International, Summer 2010 77
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