Fractional ownership of holiday homes is gaining popularity due to its high returns and increased demand post-pandemic. Not only holiday homes, the concept is also expanding to other spaces like commercial and residential projects.
However, vacation homes in India, once reserved for the wealthy, are now attracting a broader range of buyers. This idea of fractional ownership is like a modern version of timeshares, but with more benefits and affordability. It is one way of offering middle-income investors a chance to diversify their investment options at lower budgets.
What else adds to its benefits? Let’s look into it thoroughly.
How Exactly Does Fractional Ownership Work?
Fractional ownership of holiday homes lets multiple people share ownership of a property, without having to buy the whole thing. Each person buys a portion and can use the home or any other desired property for a set amount of time based on their investment.
This is great for those who want a vacation home but only use it occasionally and don’t want to pay for it when they’re not there.
People can buy more portions if they want, or sell or give away their share. This way, everyone shares the costs and benefits of owning the property. It’s a way for people to invest in valuable assets like real estate without needing a huge amount of money upfront.
Advantages of Co-Owning a Holiday Home
For many middle-class Indians, buying luxury holiday homes or second homes is a big investment with low returns. While they might seem glamorous, it’s often not the wisest choice unless you’re extremely wealthy. That’s where fractional ownership comes in handy.
Fractional ownership of holiday homes offers a convenient and accessible way for individuals to use their property occasionally. So instead of purchasing the entire property, sharing ownership with others makes it more manageable and practical.
Currently, there is a new trend for building eco-friendly holiday homes due to increased concern for sustainability. Investing in and co-owning such properties can be quite profitable.
Here are the benefits elaborated.
1. Cost Sharing
Suppose a home costs ₹1 crore to purchase outright. A 1/4th fractional ownership of holiday homes would entail an expense of around ₹25 lakhs, while a 1/12th ownership would cost around ₹8.33 lakhs. See how it reduces the financial burden?
Additionally, ongoing expenses such as maintenance fees, property taxes, and management fees also get divided among the fractional owners.
It’s advisable to research specific properties and consult with real estate agents or fractional ownership companies to get a more accurate idea of the total expenses involved.
2. Access to Premium Locations
Investing in a second home in prime locations can be prohibitively expensive for most individuals. However, through fractional ownership, investors can afford properties in sought-after destinations such as beachfronts, hill stations, or heritage towns, thereby enhancing their vacation experience.
Have a look at the availability of plots in Burul, near the Ganga River. Manafuli Ganga Villas is one of our projects, ideal for occasional getaways. Here, you can consider fractional ownership of holiday homes, luxurious and comfortable. You can build your second home right beside the peaceful river.
This would be a great way for middle-income individuals to make a long-term investment and reap its benefits.
3. Diverse Investment Portfolio
Fractional ownership enables investors to diversify their real estate portfolio without committing significant capital to a single property. Instead of tying up funds in one vacation home, individuals can spread their investments across multiple properties, reducing risk and potentially increasing returns.
4. Professional Management
Maintaining a vacation home can be tricky, especially with all the upkeep and management tasks. But with fractional ownership of holiday homes, you don’t have to worry about it. One can hire a management company to take care of everything, starting from stocking up and preservation to housekeeping. They make sure the holiday home is always ready for you to enjoy whenever you want to visit.
All that is possible at Ganga Villas if you intend to build your second home. It is a perfect option for family weekend getaways from Kolkata, making the setup stress-free for owners. They don’t have to deal with the hassle of managing the property themselves if they are involved in co-investment.
5. Flexibility and Convenience
It is worth mentioning that fractional ownership of holiday homes offers greater flexibility compared to traditional ownership alternatives. Owners can schedule their stays according to a predetermined usage agreement, allowing them to enjoy the property during their preferred times without the constraints of full-time ownership.
6. Rental Opportunities
Fractional ownership of holiday homes also provides the benefit of rental income. By co-sharing investments, individuals can generate income through rentals when the property is not in use. This arrangement maximizes usage, making holiday homeownership more financially feasible. It’s a smart way to enjoy vacation properties while offsetting expenses.
Indeed, it’s now confirmed that fractional ownership of holiday homes is a smart move for those wanting to spice up their investment portfolio, especially those in the middle-income bracket. It lets you split costs, have pros handle the management, and also opens up a way for extra income.
One can enjoy their family getaways without the hefty financial or full-time commitment of owning a property outright.