For many of us, owning a second home may seem like an impossible feat, both in terms of the financial commitment and the practical considerations that come with it. Fortunately, the shared ownership property industry has created several alternatives which provide a way to enjoy the pleasures of having a second home without the same level of burden. Timeshares, fractional ownership, private residence clubs and destination clubs are all options that enable those with limited means to have access to all the advantages of a second home without having to fully commit to buying one.
Additionally, there is also a modern and smart option available for those who don’t want to be tied down by traditional ownership structures. Let’s take a closer look at how each option works and explore how they can help those looking for an accessible route into second-home ownership.
Fractional Ownership vs Timeshare Vs Vacation Clubs vs HotelYaari Model
Introduced in India in the 1980s, Timeshares offer an individual or family the opportunity to purchase a right of use for a specific period of time, rather than true property ownership with associated accrued equity. Owing to the fact that multiple parties can own a single timeshare unit at any given time, with as many as 52 owners potentially being involved, it is possible to acquire access to a condo, apartment or resort room on a week-long basis for an average upfront unit price of 5 lacs plus yearly maintenance fees that are often subject to increases over time.
Debate continues to surround the value of timeshares; while the initial cost is lower than that associated with owning an entire second home, there is potential for significant depreciation and often difficulty in securing resale opportunities.
Fractional ownership of real estate is an increasingly popular method of acquiring a stake in property through collective investment and sharing of costs. This approach is most often seen in condo and resort communities, which are typically comprised of 8-20 owners who each hold an equal portion of the title to the property, while concurrently minimizing their individual liabilities towards maintenance and taxes.
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As opposed to traditional timeshare models which limit access to the home for one or two weeks per year, fractional ownership can allow for up to four weeks or more access to the residence annually, depending on the number of owners involved.
Private residence clubs represent a unique form of Vacation Club ownership that offers many of the same benefits as fractional ownership, with enhanced amenities typically found in high-end hotel properties. By purchasing condominiums associated with the club, owners gain access to exclusive golf courses or ski resorts and services such as maid-cleaning and turndown service. Moreover, members of private residence clubs are also provided access to other properties within the chain’s portfolio.
The entry-level cost of a private residence club is generally between 25 lacs and 1 crore depending on its location; however, owners must also factor in annual fees that range from 1 lacs to 5 lacs. Despite these additional costs, these luxury vacation clubs can still provide equity opportunities similar to fractional ownership arrangements.
Destination clubs deliver exclusive access to privileged services, granting members the opportunity to experience luxury vacation homes on a non-equity basis in locations across the globe. Preferring flexibility and individual choice, members forgo a traditional mortgage payment in favor of membership tiers that promise reservation priority, tailored services, and amenities such as beach clubs, private chefs and high-end spas.
Prices are comparable to those of private residence clubs, although properties often consist of luxurious single-family dwellings. As inventory is based on availability, prime spots at the most sought-after destinations can be difficult to come by during peak times.
The HotelYaari Model : The HotelYaari model provides a unique opportunity to co-own a Hotel Room or Holiday Home with relative ease. To understand this concept better, it is important to first define what a Condo is. A Condo is a term used to denote a Hotel Room or Holiday Home; for example, if a hotel has one hundred rooms, then it will also contain one hundred condos. Sub-condos refer to parts of a single hotel room or holiday home that have been divided up; so, if an entire hotel room or holiday home is divided into ten parts, there will be ten sub-condos available for purchase.
Investing in these sub-condos can potentially yield significant returns through the rental of the sub-condo and capital appreciation over time. Moreover, depending on the location and amenities offered by the hotel property in question, investors may even benefit from increased rental yields due to heightened demand for accommodations in desirable locations or those offering attractive amenities.
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For those looking to invest in a HotelYaari property, they have the option of purchasing either an entire condo or just one sub-condo. In order to facilitate this process and provide legal protection, HotelYaari creates a Special Purpose Vehicle (SPV) in the form of a Private Limited Company for each respective hotel or resort. This ensures that the ownership of that particular hotel or resort is securely transferred to the Private Limited Company.
When opting to purchase Sub-condos, buyers will be granted a number of shares based on the cost of their Sub-condo. This provides them with ownership rights over those shares as well as associated voting rights. Additionally, they will also receive monthly payouts based on the shareholding amount along with Vacation Nights at that particular property. Conversely, if someone desires complete ownership of a Hotel Room (Condo), Multiple Hotel Rooms or Multiple Sub-Condos then this can be accomplished through HotelYaari’s comprehensive range.
HotelYaari is revolutionizing the concept of true real estate property ownership, allowing individuals to purchase a single-family home or suite/room and benefit from the appreciation of the whole-travellers market. With a maximum of 20 co-owners, far fewer than traditional timeshares, owners can enjoy exclusive use by themselves and their guests, as well as reap the rewards of renting it out in a pool or on third-party websites if it remains underutilized.
Additionally, HotelYaari offers dramatically lower operating costs with zero markups on items like property management and repairs while providing an efficient and standardized reselling approach. Allowing for less expensive and more accessible second home ownership, HotelYaari puts the joys of true real estate property ownership within reach.
In conclusion, HotelYaari is revolutionizing the concept of real estate property ownership, giving individuals the opportunity to purchase a single-family home or suite/room and benefit from the growing demand for travel accommodations. By offering an innovative approach to property ownership, HotelYaari allows individuals to capitalize on the appreciation of the whole-travellers market, allowing them to reap greater financial rewards through their investments.
With its unique model of combining real estate investments with travel accommodations, HotelYaari is transforming the way that people think about real estate ownership and providing new opportunities for individuals to increase their wealth.