Sunny and share

Worried that buying property abroad is going to be more hassle than it’s worth? Alexander Garrett explains why sharing the responsibility with other investors can make the leap much easier – and still be a profitable move

Owning a property abroad can have its downsides: the costs of buying and maintaining it, not to mention the worry of things going wrong. It’s hardly surprising, then, that there are an increasing number of choices for those who want to share the responsibility, costs and upkeep with others.

Timeshare is often sold on this premise. But it is only a right to ‘use’ a property, not ‘own’ it, and you’re unlikely to sell at a profit. In the last few years, there’s been growing interest in a new alternative: fractional ownership. With a fractional property, you own a share of an apartment or villa – it could be as much as a third or a quarter, or as little as one-tenth – but as well as the right to use it during ‘your’ weeks, you get a share of the title. So you stand to gain if property prices go up.

The concept has been tried and tested in North America, South Africa and other parts of the world for some time, but has only recently started to take off in Europe. The country where it has been most successfully promoted is Portugal, where developer Vigia Group (vigiagroup.com) has been offering fractional ownership on the Algarve for 12 years. At its resorts, Vigia offers a range of fractional options: Twelfth Shares, Quarter Shares, or ‘Four Seasons’ shares, which give you two weeks in each of the seasons. With prices in the Algarve having risen rapidly over the last decade, fractional ownership has enabled people to buy there who couldn’t have

However, affordability is only one reason people buy fractional property. At the upper end of the market, Best Group offers one-fifth shares – known as Pentics – at luxury serviced properties in the Caribbean, South Africa’s Cape and New Zealand. Brad Lincoln, the company’s chief executive, says: “We started out thinking this would appeal to people who couldn’t afford to buy a £1m property, but wanted the opportunity to use it; in fact many of those who’ve bought into our properties could afford it, but they prefer to hand over the key to us, because they don’t want the hassle of outright ownership. Our philosophy is that all our owners should ever have to worry about is packing.”

Prices for Pentics range from £64,000 for a one-bedroom apartment in Cape Town’s Waterfront Marina to £99,000 for a twobed apartment at Sugar Hill in Barbados.

With fractional ownership, there’s usually a ‘rota’ that determines which weeks you get each year; one disadvantage to owning in this way is that the precise week you want – for example to celebrate an anniversary – may not be available.

Most fractional properties are new-build apartments and villas, though there are a number of renovation schemes in Italy. You inevitably pay a bit more than the market value for your share, because of the marketing costs entailed. It’s also difficult to raise a mortgage on fractional property. On the plus side, you may be able to exchange some of your time through a programme such as Interval International (intervalworld. com) to use properties elsewhere, and the developer will often let your property on your behalf when you don’t need it.

An alternative to fractional property is to invest in a fund or a club in which you own a stake in a portfolio of properties and benefit from their overall growth (hopefully) in value. Rocksure (rocksureproperty.com) is one such company; its second fund called Bravo is seeking some £7.6m to buy six houses, each worth around £1m, in the US Rockies, Phuket, Marrakech, the Algarve, Brazil and Croatia. The fund is divided into 40 full shares, at £189,000 each, which entitle the owner annually to four weeks of holiday at one or more of the properties. David Rogers, the former Abercrombie & Kent executive who is a co-founder of Rocksure, says: “These houses will rent for around £4,000 a week, so our investors can look at their weeks with us as a very attractive dividend.” After seven years, the properties will be sold, hopefully at a profit, and the owners will share the proceeds.

If you’re more interested in holidays than investment, then timeshare may be worth a look. For a few thousand pounds, you can reserve a week at the holiday home of your choice, with the option to exchange with hundreds of others. A similar scheme called Holiday Property Bond (hpb.co.uk) is based on acquiring points rather than a week at a specific property. On all shared ownership schemes, the purchase price isn’t the end of the story: there’s invariably an annual management fee to pay. But it could still prove a good way to secure your place in the sun when you want it.

Alexander Garrett is a property journalist based in London

Sharing the wealth

Villas on the Green
A three-bedroom townhouse on the fairway at the only championship golf course in St Lucia. Ownership brings with it membership of the club as well as a beach club and spa. A one-fifth share is $195,599 (£95,321). Best Group, thebestgrp.com

Castello di Casole
A 4,200-acre estate comprising a range of restored stone farmhouses in Tuscany, Italy, with one-tenth shares available from €315,000 to €590,000 (£224,921 to £421,285), www.castellodicasole.com

The Hideaways Club
A private residence owners’ club with a range of luxury properties around the Mediterranean. Property pictured is a ski chalet at Haute Nendaz, Switzerland. Membership from £190,000, www.thehideawaysclub.com

Worldwide Private Residences
Investment in a fund that will own a portfolio of luxury residences, with an average value of £1.35m. The property pictured is a three-bedroom detached house at Canadian ski, golf and lake resort Tremblant. Minimum investment is £150,000. Pure International, www.pureintl.com

Parque da Floresta, Algarve, Portugal
A three-bedroom golf villa with heated swimming pool, garden and BBQ costs from €70,875 (£48,382) for a Twelfth Share giving one month annual occupancy. www.parquedafloresta.com

Getting there
For more information about organising a holiday to any of the destinations in this feature, contact Airtours, tel. +44 (0)870 900 8639 quoting ‘Recline’ or visit airtours.co.uk or MyTravel at www.mytravel.com