Fractional Ownership

WHY FRACTIONAL OWNERSHIP?
(THE BENEFITS OF FRACTIONAL OWNERSHIP)

More and more people are realizing that the best solution for owning a second property is Fractional Ownership – the benefits are endless…

• Nobody makes use of a second property or holiday home all year round. Fractional Ownership offers you the perfect solution - only pay for what you use.
• It offers more affordable ownership in exclusive leisure destinations as costs are shared. Majority of people would otherwise not be able to afford a second leisure property.
• You can invest in more than one leisure property in different locations at the same cost as one single property.
• Conventional property investment would cost 13 times more.
• Leisure destinations, because of demand, increase in value much faster than average residential properties.
• Minimal capital outlay whilst enjoying maximum benefit in different locations.
• You don’t have the sole burden and cost involved in maintaining and managing the property, as this is shared between all shareholders and taken care of by someone else.
• You can earn rental income for your own sole benefit if weeks not utilized are rented.
• You can exchange your time slot to suit your individual needs and requirements.
• Limited security concerns as result of maximum usage and higher occupancy, and secure estates / developments.
• You can sell your share in the property at the current property market value at any time.
• You invest in property with capital growth.
• Limited surety for your portion only – not the entire value of the property.
• Own your holiday destination as opposed to renting it.
  

You get more for less…

IS FRACTIONAL OWNERSHIP SIMILAR TO TIME SHARE?

NO!

The only similarity is that more than one party is involved in the property… However the advantages of Fractional Ownership over timeshare are distinct and far more superior.

• Timeshare buys you time – Fractional Ownership buys you an appreciating asset.
• With timeshare you never own the property or become a shareholder.
• Property value increases and so does your shares within Fractional Ownership.
• Fractional Ownership unlike timeshare is aimed at a more up-market sector.
• Timeshare decreases in value whilst Fractional Ownership accumulates capital growth.
• Fractional Ownership shares can be sold at any time – no contractual period.
• With timeshare demand is higher than supply – availability is a serious concern.
• Timeshare includes brokerage commissions of up to 60%. Fractional Ownership attracts standard sales agents’ commission of approx 7%, but like with any property transaction is paid by the seller.
  

HOW DOES FRACTIONAL OWNERSHIP WORK?
The concept is perhaps best demonstrated by way of example. 13 Investors each purchase 7.7% of the shares in a company which owns a leisure property worth R1.950 million, for R150 000 each, and in return, each receives 7.7% share in the property, as well as 4 weeks a year (in different periods) at an exclusive holiday destination.

FZP Fractional Ownership will select & secure the land, ensure development of the property, and market to potential shareholders.

Development Steps

• Location is selected based on high demand and capital growth
• Land/plot is surveyed and considered for optimal growth and potential
• A syndicate company is registered which acquires the land
• FZP Fractional Ownership enters into agreement with the syndicate company in respect of development, project management & marketing of shares.
• Shareholders commit & contribute with payments at various intervals to facilitate completion of the project.
• Upon completion of the project the property is handed over to the syndicate company and the shareholders agreement is signed.
• The management agreement is signed between the syndicate company and FZP Fractional Ownership. This includes marketing of the rental pool.
• Your payments are held in a trust account which is managed by a firm of Attorneys /Auditors, which have the skills and experience in Fractional Ownership .
• Upon transfer into the syndicate company, each shareholder receives a fully tradable share certificate indicating the shareholding in the property/company.

Your investment remains exclusive in that the number of shareholders is limited to 13, or less, per property - unlike timeshare.

Shareholders are conventionally allowed 4 weeks holiday period or usage per annum for every 7.7% (1/13th) share. These weeks are split up into various time slots (2 weeks peak and 2 weeks off-peak) and rotate on an annual basis. Investors can however take up more than one share. No shareholder can take up more than 25% share.

FZP Fractional Ownership will always retain a share in the property indicating our confidence and commitment.
Fractional ownership operates on a usage roster. A specific roster is developed for each property in advance for up to 10 years ahead. Weeks are rotated on an annual basis giving all shareholders equal opportunity. All shares therefore have equal value.

Exchanging and/or combining allocated weeks may be done via FZP Fractional Ownership at the discretion of the respective owners.

Should you prefer not to make use of your allocated weeks, you may make your time slot available into the rental pool for your own profit.

The management of the property (including rental), is taken care of by one party - FZP Property Management (Management Company).

IS FRACTIONAL OWNERSHIP FOR ME?

If you answer yes to any of the following questions, you are a candidate for Fractional Ownership.

• Are you interested in entering / investing in the property market?
• Do you want to own a second property / holiday home?
• Are you interested in diversity of your investment portfolio?
• Do you have cash available or equity in your existing bond?
• Would you prefer more choice and flexibility during your holiday?
• Are you interested in creating wealth through a leisure property?
• Do you want better returns on investment by lowering risk?
• Would you rather prefer someone else to manage your holiday home?
• Do you rather want to own your holiday home as opposed to rent it?
• Would you prefer a better lifestyle?
  

HOW MUCH DOES FRACTIONAL OWNERSHIP COST?
The price you see is what you pay – NO valuation fees, bonds costs, VAT etc. These costs could be as much as 15% of the purchase price.

Cost / Payment
A cash deposit of 10% upon signature of the agreement.
Balance of the land price (or 40%) within 30 days by means of guarantee or cash payment.
6 equal monthly payments to facilitate the development of the property / secure the balance of the purchase price, OR
50% of the share price may be financed over 10 years. Finance would attract a fee of R5000.00

Monthly Expenses (Levies)
Example:

Estate/Sectional Title Levy R950.00
Rates, Taxes, Water & Electricity R350.00
Short Term Household (Content) Insurance R500.00
Housekeeping / Domestic Service  R600.00
Maintenance Provision (Pool, Jacuzzi & garden)  R350.00
Refurbishment Provision  R500.00
DSTV (Satellite)  R450.00
Accounting & Audit  R750.00
Management Fee  R1350.00
   
Total per month  R5800.00
Total per shareholder (1/ 13)  R446 per month 

All the shareholders have full access to the budget and actual spending of the company.

WHAT DO I GET?
You receive a % share in a leisure property and appreciating asset, together with:

• A property in an exclusive holiday destination.
• A property which increases in value more than the average residential property.
• A real right in the property and the control thereof.
• A right to use to property as per the usage roster.
• A fully tradable right and share certificate.
• Every leisure property in our portfolio is owned by an entirely separate company with the only asset being the one single property. No other company can therefore influence this company or your shares.

WHERE DO I START?

• Choose your time slot – as per usage roster
• Request & Sign a Sale of Shares Agreement
• Make payments as per the Sale of Shares Agreement
• Sign a Shareholders’ & Usage Agreement
• Share certificate is issued upon full payment of purchase price and completion of project