Co-Ownership Of Luxury Holiday Homes. The Next Big Thing In India
As the name suggests, the co-ownership concept allows numerous people to buy a property together as co-investors through a management agency
By Aditya Kushwaha
A spacious beachside villa is a dream for many, but the steep cost and exposure have kept them out of reach for many. To bridge this gap and make luxury second homes accessible to the greater public, the developers have started offering the option of co-ownership. As the name suggests, the concept allows numerous people to buy a property together as co-investors through a management agency. The investor in a co-owned property can trade that piece of real estate just like any other. Some organisations purchase properties and then sell them to investors with no rental return, while others promote assets and sell them to investors with a rental return.
The concept is already a raging hit in the European market and is now making inroads in India. Another reason for the growing popularity and interest in co-ownership is the heightened popularity of holiday homes. In the post-pandemic world, an increasing number of people are looking to invest in a holiday home that is away from the confines of a city and allows them to rejuvenate and be closer to nature. Co-ownership allows people to invest in a holiday home and expand their canvas and add in all the amenities they aspire for at a fraction of the cost.
Ownership cost
The most significant advantage of having a co-owned luxury holiday home is indeed that the cost of ownership gets divided. Still, it is not the only advantage that it offers. Enormous villas with attached swimming pools also require more significant maintenance. In the case of co-owned property, these costs also get divided among owners. Given that an investor is only investing a smaller percentage in buying a stake in a holiday home allows for greater flexibility, and they can limit their exposure limit. They also have the option to invest in multiple holiday homes across locations to offer them more options and better returns.
There are several locations that are becoming the preferred choice for co-owned houses. Goa continues to lead the race as it offers something for everyone. Other popular regions among homeowners are Bengaluru, Shimla, Alibaug, Coorg and Lucknow.
Navigating through these new realms
There are many merits to co-ownership, but the buyers also need to be well-informed of the drawbacks and challenges. The biggest challenge is ensuring the right project and that an individual’s rights as an owner are preserved. One also needs to make sure that the projects allow them the option to exit from the investment when they want. Another challenge homeowner’s face while investing in a co-owned property is that most banks and financial institutions don’t give out home loans.
Overall, the concept of co-ownership has a lot of potential, and it is ideally suited for the growing aspirational class. It is an ideal way to have a holiday home and reap its benefits without committing substantial money. However, these are still early days, and investors should weigh all the pros and cons before investing in a co-owned luxury home.
The writer is the CEO and director at Axis Ecorp.
[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP News Network Pvt Ltd.]
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