This concept is proving a hit in Mombasa and other coastal areas, where up to 12 buyers can own a share in a holiday home – which they are at liberty to live in it under time-share or rent it out.
Where 12 individuals own shares in a single unit, it means that each buyer owns the property for one month every year. Rental income is shared factoring in the time each co-owner availed the apartment for letting.
The concept is reserved for luxury homes in vacation destinations such as Mombasa and Malindi, and it is offered by both multi-unit developers and high-end resorts.
Baobab Group’s sales manager Miriam Magare said: “Most of them (buyers) are here for business and therefore prefer buying shares of the house and then receiving returns even when away because we rent the houses on their behalf.”
Every co-owner is allocated a week each quarter of the year until the four weeks elapse, said Ms Magare who added that the apartments come with a full legal title on a 99-year lease.
Fractional home ownership, popularised by American investors in the 1990s, is almost similar to a time-share except that it has fewer buyers (12 maximum) which increases the amount of time available to each buyer.
It allows an individual to take part of a valuable asset (holiday home) without raising the cash to buy the entire property outright. The concept is very similar to owning shares in a company.