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THE BEST WAY TO OWN A HOLIDAY HOME – FRACTIONAL OWNERSHIP?

Many of us may like a holiday home abroad but don’t want the hassle of full ownership and all the responsibility that incurs such as maintenance, who’s going to keep an eye on the place when we’re not there, particularly if we rent it out,  and do we want to self-cater again!

Timeshare can provide an answer but there are ever escalating maintenance charges and again it’s self-catering and many of us are still suspicious of the concept due to the number of well-publicised scams over the years.  And at the end of the day money is spent on time and not bricks and mortar.

But there is a way of combining the advantages of both – fractional ownership.  This type of ownership focuses on investment terms rather than holiday and leisure rights and offers both a share of the underlying asset and a proportion of income derived from it.

Typically the the investment programme is based on hotel rooms.  You “buy” the rights to a room which entitles you to spend a number of nights there each year and you earn a proportion of the income the room generates over the period of the investment.

One of the major players in Europe is Room to Invest (“RtI”) which has run a fractional ownership scheme for the past four years.  It has hotels in Marrakech and Slovenia but investors also have the right to stay half price in a number of other European destinations.

Minimum outlay is £2,000 and investors are able to enjoy both rental income and capital growth from the investment which is also SIPPable.  If investors choose not to take advantage of the SIPP route they will be entitled 21 nights free accommodation in in the hotel in which thay are part owner or at 50 per cent of the cost in any Room to Invest group hotel.

Those detinations include Paris, Montpelier, Istanbul, St Petersburg, Budapest and Prague as well as Southern Spain and Southern Ireland.

Apart from the potential for capital growth RtI is estimating room owners can earn up to 11.5 per cent a year.  All room holders will benefit from profits made on any future sale of the hotels.

Investors are able to pass their holding down to future generations or, after holding their investment for 12 months, can sell their holding and RtI will help to find a buyer.

RtI Marketing Director, Chris Rathbone, said:  “Our experience shows that more and more people are realising the benefits of fractional ownership over timeshare or owning a holiday home abroad outright.

"Major motivations are not having the responsibility of upkeep or, in the case of timeshare, being overburdened with increasing maintenance charges.  Then, of course, there is the attraction of being able to use all the facilities of a top class hotel".

He said the RtI investment was also available in a portfolio of alternative investments under the Multi-Asset Guarantee brand, run by alternative investment specialist Capital Alternatives.  The portfolio splits investment monies equally between wine, gold, memorabilia and the hotel fractional ownership scheme.

For further information:

Chris Rathbone, Marketing Director Room to Invest 020 7324 5428

Paul Quade  020 7248 8010