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Investment options for fractional ownership and fractional rent

| Guidance | October 16, 2012

If you lose money as a result of attempting to set up or entering into a sharing agreement or syndicate, yours2share has no liability for your costs. yours2share is simply the “matchmaker”.

The information on this page, and the whole of the yours2share website, is based upon the laws in England and Wales only. However the law in Scotland and Northern Ireland is similar.

How does the cost of sharing compare with buying or hiring?

Below you can download a spreadsheet that enables you to calculate quickly the comparative costs of buying, buying and letting, hiring and sharing.

This spreadsheet is specifically designed to give an ESTIMATE of the financial values to be considered when purchasing any valuable asset. It deliberately simplifies some aspects of the financing in order to give ball-park values that can be easily understood.

To see what the spreadsheet looks like before downloading, here are some worked examples:

Holiday cottage worth £100,000, required every other weekend.

  • Cost to buy and use as second home, without letting
  • Cost of hiring a similar cottage
  • Cost to buy cottage with a partner, without further letting
  • Cost to buy and use as second home, fractionally letting alternate weekends

Narrowboat approx five years old worth £40,000

  • Cost to buy without letting it out
  • Cost of hiring similar boat for four weeks a year
  • Cost to buy 1/12th share

Please read this DISCLAIMER before downloading (it is not long and it is important).

Download spreadsheet

If you have any comments or suggestions about the spreadsheet, please let us know.

Can I simply be an investor?

There are many advantages for investors in shared ownership of assets that are expected to appreciate in value, particularly real estate and fine art. These include:

  • Increased buying power can enable better quality properties or art can be bought, which may give a greater return.
  • Lower cost of purchase, buying one house costs less than buying several apartments.
  • The effort and costs of finding and managing the asset is shared.
  • Ideally the investors will bring complimentary skills to the purchase process: financial, legal, construction and design.

Can investors share with “new” buyers?

All the owners can be investors who then rent out the property or store the fine art, or the owners can be a mixture of investors and users. Often the users will be “novice” buyers, first-time buyers of property or new to fine art. There are some particular advantages when there is a mix of novice buyers and experienced investors:

  • For real estate, investors can match with buyers who will live there. They buy a two bedroom property, one sharer has one bedroom and the other bedroom is rented to cover the investor’s share. The first-time buyer gets their foot on the property ladder, and the investor has free property management, rent collection and maintenance by a person immediately available, who cares about the property.
  • For fine art, investors can find partners who would like to display the art, saving them the storage costs and reducing insurance costs. The novice buyer starts their art collection, and the investor has someone with a vested interest keeping an eye on the asset.
  • Novice investors benefit by teaming up with experienced investors who can help them through the buying and owning process, avoiding the many potential traps.
  • Experienced investors can gain from a partnership with a novice, particularly from their local property knowledge of an area, or specific knowledge of certain art genres.

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