Business Models
Developers often face the decision as to what is the most appropriate shared ownership business model for their real estate development. A number of factors shape this decision including property location, target market, regulatory environment and ROI requirements. These business models are most common in the global shared ownership industry.
Shared Ownership
Shared ownership offers a period of use for a given type of accommodation each year in a managed resort environment. The use-rights can either be fixed or floating.
Fractional Use
This model is very similar to shared ownership but properties are generally of a much higher standard, such as luxury apartments, condominiums or family houses in a secluded setting in an urban, beach or mountain location. They also often include a wider range of services and offer longer ownership periods.
Private Residence Clubs
Offering owners luxurious, typically purpose built properties in select locations and longer share times as well as a wide array of additional benefits, Private Residence Clubs have emerged as a growing alternative to second home ownership. The low member-to-property ratios simplify the reservation process and ensure that the property remains exclusive.
Destination Clubs
These are similar to Private Residence Clubs, except rather than buying usage rights or title to a specific property, owners buy membership of a club. The club acquires a number of up scale apartments and villas in several locations on behalf of its members for their exclusive use.
Condo-Hotels & Whole Ownership
These products offer the investor whole ownership of a managed unit within a luxury hotel development or a residential property development. Typically the owner will have between four to six week’s annual use and the remaining time will be used by the management company to generate revenue through an organised rental programme. Proceeds are split between the owner and management company.
Mixed-Use Developments
This type of resort development comprises a mix of different hospitality business models, including timeshare, that have been successfully integrated within the same resort. Benefits include better marketing and lead generation opportunities, shared facilities and services, higher occupancy rates and greater customer retention.
