FabSwingers.com forum: Fractional ownership

By *ndiancouplexxx OP Couple
over a year ago

milton keynes

Has anyone purchased an apartment in Spain through fractional ownership? We would like to stay in Spain for one or two months a year and are thinking of buying an apartment. The only thing is what we do with it for the rest of the time. We could rent it out or the other option would be to buy a share of it with other people and slit the time we have there. What are your thoughts?

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By (user no longer on site)
over a year ago

But your own apartment, rent it out when not there.

Do your research and make sure it’s in a sought after holiday resort/ area or golf complex

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By *allySlinkyWoman
over a year ago

Leeds

If you only want it for one or two months a year, wouldn't it be less complicated to rent somewhere ? Split ownership you may have to compromise on what months you each wanted.

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By *otlovefun42Couple
over a year ago

Costa Blanca Spain...

"If you only want it for one or two months a year, wouldn't it be less complicated to rent somewhere ? Split ownership you may have to compromise on what months you each wanted."

We would have to agree with that.

The "fractional ownership" idea, which is really nothing more than a tailor made timeshare, would be a minefield.

Even if you shared it with only one other couple disagreements would almost certainly soon come to the surface.

Not only as to who wants it when but all sorts of other things.

Maybe you would want to replace the kitchen but they don't, or vice versa. They think that the place needs painting, you don't, or vice versa and so on and so on.

In time maybe you or they decide they want to sell up but the other side don't want to (or can't afford to) buy the share. Then what?

A holiday home is supposed to be a stress free place where you can relax. Shared ownership would only bring stress.

There are plenty of places to rent for a month or two. From small apartments to detached villas and for that short time would be a much better option.

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By *ess n BenCouple
over a year ago

Didcot

"If you only want it for one or two months a year, wouldn't it be less complicated to rent somewhere ? Split ownership you may have to compromise on what months you each wanted.

We would have to agree with that.

The "fractional ownership" idea, which is really nothing more than a tailor made timeshare, would be a minefield.

Even if you shared it with only one other couple disagreements would almost certainly soon come to the surface.

Not only as to who wants it when but all sorts of other things.

Maybe you would want to replace the kitchen but they don't, or vice versa. They think that the place needs painting, you don't, or vice versa and so on and so on.

In time maybe you or they decide they want to sell up but the other side don't want to (or can't afford to) buy the share. Then what?

A holiday home is supposed to be a stress free place where you can relax. Shared ownership would only bring stress.

There are plenty of places to rent for a month or two. From small apartments to detached villas and for that short time would be a much better option."

A very sensible reply and advice, be very careful what you do and make sure you get a good solicitor

We had our place in La Cala for six years and had no problems with buying or selling, we done our home work which is boring but essential

Good luck

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By *aydhiCouple
over a year ago

aldgate

Hi, we have 3bedroom apartment with sea view. Whenever we get opertunity we go and stay there and other time we rent on Airbnb and make some money. We have accountant, bank connection for mortgage and team for mantaince. We end up with very good deal, looking to buy another one very soon.

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By (user no longer on site)
over a year ago

"Hi, we have 3bedroom apartment with sea view. Whenever we get opertunity we go and stay there and other time we rent on Airbnb and make some money. We have accountant, bank connection for mortgage and team for mantaince. We end up with very good deal, looking to buy another one very soon. "

Interesting...what % yield do you reckon you make on it??

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By *ndiancouplexxx OP Couple
over a year ago

milton keynes

Thanks for the advice guys, renting sounds like the easier option. Would love to hear from anyone who has something to rent in Gran Canaria.

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By *aydhiCouple
over a year ago

aldgate

On long term rental is 5.5%, and on short letting (based on whole year income - expenses, tax) 12.5%.

Due to Covid at this moment it is 4.3% on short letting

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By *aydhiCouple
over a year ago

aldgate

Rental us easy option, but looking for investment to get some return than purchase is good option and very easy to get mortgage from Spanish bank to finance property.

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By (user no longer on site)
over a year ago

"On long term rental is 5.5%, and on short letting (based on whole year income - expenses, tax) 12.5%.

Due to Covid at this moment it is 4.3% on short letting"

Still excellent return compared to any Bank...thanks for that

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By *aydhiCouple
over a year ago

aldgate

Yes, that's for sure. Just Covid is slow down this things. Buy hope it will change soon.

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By *ostafunMan
over a year ago

near ipswich

"Has anyone purchased an apartment in Spain through fractional ownership? We would like to stay in Spain for one or two months a year and are thinking of buying an apartment. The only thing is what we do with it for the rest of the time. We could rent it out or the other option would be to buy a share of it with other people and slit the time we have there. What are your thoughts?"
Be aware that you will have to pay 24% modelo 210 tax which is a tax for non residents. If your property is left empty, even though you do not let out your holiday home for gain, Spanish law assumes you have what is called a “Deemed (Rental) Income” which is subject to non-resident Income Tax.

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By *aydhiCouple
over a year ago

aldgate

This tax is not very big amount. You can check before buy property.

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By *ensualmassagemanMan
over a year ago

Ciudad Quesada/Rojales costa blanca spain

"Rental us easy option, but looking for investment to get some return than purchase is good option and very easy to get mortgage from Spanish bank to finance property. "

Do you have a link to your Airbnb?

Rob

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By *aydhiCouple
over a year ago

aldgate

Just DM you.

We have few apartment in London as well

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By *lamourpussyCouple
over a year ago

Cirencester

"On long term rental is 5.5%, and on short letting (based on whole year income - expenses, tax) 12.5%.

Due to Covid at this moment it is 4.3% on short letting"

That’s fine but the same investment in the UK would give you a far greater return on property value alone. We have an apartment in Majorca and definitely wouldn’t advise anyone to buy unless you intend to live there.

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By *aydhiCouple
over a year ago

aldgate

But require big amount of investment as well, with small savings you have to looks different options.

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By *ostafunMan
over a year ago

near ipswich

"On long term rental is 5.5%, and on short letting (based on whole year income - expenses, tax) 12.5%.

Due to Covid at this moment it is 4.3% on short letting

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By *axtanMan
over a year ago

los Cristianos now

And do not forget the 'purchase tax' and other expenses which is approx. 10% so you give away €20000 on a purchase value of €200k. €20000 buy a lot of rental with little or no responsibility.

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By *anaryxMan
over a year ago

Gran Canaria

Hi,

I live between London and Gran Canaria, and i know owners here selling some properties

Jose

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By *ilent_runningMan
over a year ago

Bournemouth, Notts & Spain

"And do not forget the 'purchase tax' and other expenses which is approx. 10% so you give away €20000 on a purchase value of €200k. €20000 buy a lot of rental with little or no responsibility. "

And the 5+% estate agents fees on selling

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By *aydhiCouple
over a year ago

aldgate

Only worth it, if you have plan to get return by renting or holiday rentals.

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By *chico94Man
over a year ago

Las Palmas, Spain

could recomend you few places but depends where are you finding (PDI or Las Palmas)...

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By *den_GCCouple
over a year ago

San Fernando, Gran Canaria

"Hi,

I live between London and Gran Canaria, and i know owners here selling some properties

Jose"

You live on a boat then? Just kidding...

I live on the tablet between the white step and more pigeons on the big dog.

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By *axtanMan
over a year ago

los Cristianos now

I take it you've dropped the idea of buying in Spain - as an "investment"?

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By (user no longer on site)
over a year ago

Are the prices falling we were considering a place in the canaries

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By (user no longer on site)
over a year ago

"could recomend you few places but depends where are you finding (PDI or Las Palmas)..."
are prices falling or staying the same? i know canaries in general are more expensive cheers

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By *otlovefun42Couple
over a year ago

Costa Blanca Spain...

Can't say for the Canaries but here on the Costa Blanca prices seem to have leveled out.

After the boom in the early 2000's then the crash after 2008 they bottomed out in around 2014/15.

Since then there was steady increase up to early 2020. Then Covid struck.

I don't think the virus has caused any significant falls yet but time will tell.

Obviously Brexit will have some effect but at the moment Germans and especially Scandinavians seem to be filling the void.

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By *oo hotCouple
over a year ago

North West

"If you only want it for one or two months a year, wouldn't it be less complicated to rent somewhere ? Split ownership you may have to compromise on what months you each wanted.

We would have to agree with that.

The "fractional ownership" idea, which is really nothing more than a tailor made timeshare, would be a minefield.

Even if you shared it with only one other couple disagreements would almost certainly soon come to the surface.

Not only as to who wants it when but all sorts of other things.

Maybe you would want to replace the kitchen but they don't, or vice versa. They think that the place needs painting, you don't, or vice versa and so on and so on.

In time maybe you or they decide they want to sell up but the other side don't want to (or can't afford to) buy the share. Then what?

A holiday home is supposed to be a stress free place where you can relax. Shared ownership would only bring stress.

There are plenty of places to rent for a month or two. From small apartments to detached villas and for that short time would be a much better option."

Seriously - you could not be more wrong.

Fractional ownership has always made sense and even more so now post-Brexit.

Referring to fractional ownership as timeshare could not be more wrong. That said - it all depends on how the ownership and rights of use are constituted.

Watch this space - Fractional ownership by U.K. residents post-Brexit will increase massively.

You can put that prediction in the bank

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By *oo hotCouple
over a year ago

North West

"Has anyone purchased an apartment in Spain through fractional ownership? We would like to stay in Spain for one or two months a year and are thinking of buying an apartment. The only thing is what we do with it for the rest of the time. We could rent it out or the other option would be to buy a share of it with other people and slit the time we have there. What are your thoughts? Be aware that you will have to pay 24% modelo 210 tax which is a tax for non residents. If your property is left empty, even though you do not let out your holiday home for gain, Spanish law assumes you have what is called a “Deemed (Rental) Income” which is subject to non-resident Income Tax.

Fractional Ownership is a cost effective and tax efficient method of owning a property overseas. Set up correctly, there would be no need to to register as a foreign property owner and have to complete foreign tax returns.

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By (user no longer on site)
over a year ago

"Thanks for the advice guys, renting sounds like the easier option. Would love to hear from anyone who has something to rent in Gran Canaria."

Have a look on airbnb... then search estate agents near the area.

You then have an idea whats on the market.

Id do longterm rental unless i won the lottery

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By *aldyman500Man
over a year ago

Enfield

We go to Vera playa every year for around 3 months and always use air b&b

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By *otlovefun42Couple
over a year ago

Costa Blanca Spain...

"If you only want it for one or two months a year, wouldn't it be less complicated to rent somewhere ? Split ownership you may have to compromise on what months you each wanted.

We would have to agree with that.

The "fractional ownership" idea, which is really nothing more than a tailor made timeshare, would be a minefield.

Even if you shared it with only one other couple disagreements would almost certainly soon come to the surface.

Not only as to who wants it when but all sorts of other things.

Maybe you would want to replace the kitchen but they don't, or vice versa. They think that the place needs painting, you don't, or vice versa and so on and so on.

In time maybe you or they decide they want to sell up but the other side don't want to (or can't afford to) buy the share. Then what?

A holiday home is supposed to be a stress free place where you can relax. Shared ownership would only bring stress.

There are plenty of places to rent for a month or two. From small apartments to detached villas and for that short time would be a much better option.

Seriously - you could not be more wrong.

Fractional ownership has always made sense and even more so now post-Brexit.

Referring to fractional ownership as timeshare could not be more wrong. That said - it all depends on how the ownership and rights of use are constituted.

Watch this space - Fractional ownership by U.K. residents post-Brexit will increase massively.

You can put that prediction in the bank"

Maybe, maybe not.

It is a concept that is quite popular among the Spanish but mostly, almost exclusively, it is done within the family. Very few, if any, enter into this kind of arrangement with strangers.

Even when it stays in the family you can see the results of disputes all over Spain. Properties that have been stood empty for years due to ownership disputes are everywhere, and the sclerotic Spanish legal system certainly doesn't help.

However if (and it's a big IF) your prediction does come true then it will not be long afterwards before the horror stories start flying around.

Dress it up with fancy titles as much as you like, but by its very nature "fractional ownership" is nothing more than a customised "time share"

What next? Fractional ownership touts patrolling Benidorm promenade with scratch cards.

I'm sure some will have a go at it (even timeshare had its followers) but massive increase from the UK? I doubt it.

BTW. Are you thinking of going into the fractional ownership business? If so, I wouldn't bet the farm on it.

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By *oo hotCouple
over a year ago

North West

"If you only want it for one or two months a year, wouldn't it be less complicated to rent somewhere ? Split ownership you may have to compromise on what months you each wanted.

We would have to agree with that.

The "fractional ownership" idea, which is really nothing more than a tailor made timeshare, would be a minefield.

Even if you shared it with only one other couple disagreements would almost certainly soon come to the surface.

Not only as to who wants it when but all sorts of other things.

Maybe you would want to replace the kitchen but they don't, or vice versa. They think that the place needs painting, you don't, or vice versa and so on and so on.

In time maybe you or they decide they want to sell up but the other side don't want to (or can't afford to) buy the share. Then what?

A holiday home is supposed to be a stress free place where you can relax. Shared ownership would only bring stress.

There are plenty of places to rent for a month or two. From small apartments to detached villas and for that short time would be a much better option.

Seriously - you could not be more wrong.

Fractional ownership has always made sense and even more so now post-Brexit.

Referring to fractional ownership as timeshare could not be more wrong. That said - it all depends on how the ownership and rights of use are constituted.

Watch this space - Fractional ownership by U.K. residents post-Brexit will increase massively.

You can put that prediction in the bank

Maybe, maybe not.

It is a concept that is quite popular among the Spanish but mostly, almost exclusively, it is done within the family. Very few, if any, enter into this kind of arrangement with strangers.

However if (and it's a big IF) your prediction does come true then it will not be long afterwards before the horror stories start flying around.

Dress it up with fancy titles as much as you like, but by its very nature "fractional ownership" is nothing more than a customised "time share"

What next? Fractional ownership touts patrolling Benidorm promenade with scratch cards.

I'm sure some will have a go at it (even timeshare had its followers) but massive increase from the UK? I doubt it.

BTW. Are you thinking of going into the fractional ownership business? If so, I wouldn't bet the farm on it.

I was involved in fractional ownership here in the U.K. in the early 2000’s: boats, aeroplanes, and holiday cottages in Scotland and the Lake District. I created an owners constitution and calendar that is still being used today by one of the UK’s largest yacht brokerages.

With the 90/180 rule likely to be around indefinitely, it makes a lot of sense to buy a quarter share and not have to bother with Spanish tax returns and renting unused time. The key is in the constitution and the calendar because you are right, once people fall out it can get messy. Getting all the details set in stone at the outset is really important - even for families.

Setting up a rotating calendar with space trading is much easier now with computer applications already existing. The other issues like fixed annual costs and repairs and replacements are also easy to work out with those who use the asset most contributing more to repairs and replacements.

I have already been asked by an Agent who I used to work with in Ambleside if I would be setting up in Spain because of Brexit - but I am done with all that now to be honest.

This is an opportunity to sell to Brits, but it will depend on someone seeing (and seizing) the opportunity.

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