Four Ways to own an International Property

Entering the world of international property ownership can be exciting when faced with choices such as a tropical hideaway in the Maldives or perhaps a converted farmhouse in Southern France. Gone are the days when only the super-rich could afford that second home abroad and investors no longer have to stick to one property a year. The four main ways that people purchase property are;

• Outright Ownership
• Fractional Ownership
• Membership/Residence Clubs
• Resort Residences

Outright ownership is still the most popular choice in Europe as it means the buyer experiences little or no restrictions. Any losses or gains are entirely the purchaser’s responsibility and ensures freedom from fluctuating interest and exchange rates. Owning a property outright entitles the owner to complete independence but also to the all maintenance costs as opposed to when sharing a property. The other main disadvantage is the owner may become fatigued with visiting the same destination each holiday.

Fractional ownership gained popularity in the United States over the last two decades and has only arrived on European shores over the last few years. Initially it was used in the yachting industry to bring affordability and flexibility to that market place. Essentially it is a scheme where a group of investors (usually between four and ten) each hold an equal share in the property. This type of ownership can mean that what may seem an imbalance of price versus usage; £500K for a chateau which may only be used for 4 – 6 weeks a year could be split into £100K over 5 investors hence giving a lot more value per week. Another benefit is that all property management costs are split between the syndicate and full transfer and ownership rights are much the same as a freehold title, allowing for ease if a sale is required.

Membership/Residence Clubs are exactly that; a club which is run by a rental property management company to which you pay an annual subscription and will give you and your family a choice to of homes at various global locations. Although you will never own the property, it does give a huge amount of flexibility and good value for money with outstanding properties in many prime locations.

Resort Residences or Condominiums have become favoured with buyers who are in the middle to upper tier price ranges as this type of ownership gives them 5* luxury and some flexibility built in. Major players such as the Four Seasons and the RitzCarlton run these types of schemes where investors purchase a property on the hotel grounds. They may receive privileged discounts for in-house facilities such as golfing, spa treatments and their food and drink bills. Any unused time may be marketed by the hotel to other guests and profits split between the hotelier and owner. It can be an expensive choice but often the level of luxury outweighs the cost for those who can afford it.

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