New Ways of Acquiring Property

eyong co-living.

Co-living is not a new concept. The need to live together, to share spaces—whether caves, campsites, or houses—has always been a fundamental part of human history. But now more than ever, there’s a growing inclination toward this type of housing.

As a result of rising housing prices, communal living is on the rise, attracting people of all ages due to its lower costs, convenience, and sense of community.

However, there’s a model that goes one step further. It allows for the cost savings of shared housing without the burden of physical cohabitation.

Let me explain: Imagine your family and you spend every summer in Málaga. You’d like to own property there, but for the fifteen days you stay, it’s not financially viable.

In Málaga, you have friends in a similar situation, so you agree to buy the house together. Each investing party holds a fixed percentage of ownership and secures the right to occupy the house during specific periods. For instance, if one family purchases the equivalent of six months, they own half the property; for one month, one-twelfth.

This is what’s known as time sharing.

Time Sharing

Time sharing is an idea that has existed for quite some time. Simply put, it’s a fractional ownership model, allowing multiple buyers to purchase vacation properties. But how does it work exactly?

The time share model offers three occupancy options:

• First, you can secure a fixed week each year to occupy the house.
• The lack of flexibility in this model is balanced by the second option: the floating week, where you specify a time frame for your stay without fixed dates. However, this too has drawbacks, as availability during peak seasons is limited.
• The third option functions both as a buyer-matching system and as one of free preference. Known as the ‘points system,’ it measures or represents property based on parameters such as location, size, and availability, giving users more vacation options. However, disparities in points assigned to different vacation complexes often complicate the matching process.

Ownership Options

Additionally, ownership of the property can vary:

• Shared ownership grants each buyer a percentage of the property corresponding to the period of time purchased (like the example of the house in Málaga). Shared ownership can be resold to third parties or inherited.
• On the other hand, shared leased ownership gives the buyer the right to use the property for a fixed or floating week(s) each year over a set number of years. In this structure, the time sharing developer retains ownership of the property.

So, if time sharing doesn’t necessarily entail becoming the owner of the property, what sets it apart from Airbnb? Is time sharing still relevant in a goods-and-services-driven economy?

Timeshare vs. Airbnb

At first glance, it’s true that in terms of time and money, using services like Airbnb seems simpler, but for many, timeshare remains a viable option.

From 2010 to 2019, the timeshare sector saw revenue growth for ten consecutive years before the COVID-19 pandemic. As the industry recovers, sales have increased by 67% from Q4 2020 to Q4 2021.

Ultimately, it all depends on your budget and the type of experience you’re looking for.

However, the reality is that more and more startups are entering the timeshare industry, addressing the sector’s shortcomings.

Platforms are emerging that make this investment model faster and more efficient by transforming real estate developers into mere administrators. They charge a commission, of course, but ownership always belongs to the associated investors.

One such company is the Norwegian firm 21/5, which further refines the concept by offering the possibility of owning more properties for less.

The New “Time Sharing”

The name itself reflects the purpose: 21 families come together to purchase 5 vacation properties (in this case, luxury ones).

The 21 families connect through the platform to form an association, and the platform handles only the maintenance and management of the properties and the association—from assisting at the annual general meeting to cleaning the pool.

The properties are not purchased in advance; they are located and bought after the association is formed and all members have paid. The idea is that, this way, a family can own five shared luxury homes for the price of one.

As of today, the company 21/5 boasts 150 vacation properties and 700 associated families.

Although the platform only manages luxury residences, as explained on their website, 21/5 isn’t for everyone—but it is for more and more people.

In crowdfunding, members of a community pool their resources to access investment opportunities that might otherwise be out of reach.

Real Estate Crowdfunding

In the real estate sector, crowdfunding is relatively new in Spain. Despite this, it has already become one of the leading categories in crowdfunding in Spain, moving €219 million in 2021 alone.

Through online platforms like Housers, small investors who otherwise couldn’t access the real estate market make investments in projects for buildings, commercial spaces, offices, or homes. These properties are purchased, renovated, and then sold or rented. The profits are distributed among the investors, the limited liability company is dissolved, and a new project begins.

Moreover, you don’t need to be an expert in the field or get too involved. All transactions are managed by online platforms and real estate developers.

Currently, they have over 75,000 users and €40 million in accumulated investments.

According to the platform’s founders (Álvaro Luna and Tono Brusola):

We select properties below market value, approximately 20-25%. Then, we present potential investors with a business plan outlining the entire project, including planned renovations and subsequent rental or sale. We estimate these projects achieve an appreciation of around 35%.

Crowdfunding platforms are more flexible and faster at obtaining credit than banks. Additionally, the waiting time for returns on investment is generally shorter than with traditional investments.

If you’re looking to invest and gain short-term returns, there’s also the company Here.

Similar to 'Housers', this platform allows investment in vacation properties. Collectively funded, the benefits are divided into shares, and once again, the platform manages all operations.

It’s a highly lucrative model since, according to statistics, vacation rentals generate up to 160% more income on average than traditional long-term rentals.

Final Thoughts

Organically, innovation, development, and technology adopt a collaborative approach. This isn’t happening by chance; it’s gaining traction because it addresses society’s needs.

The emergence of these types of ownership models in an industry dominated by large fortunes and banks highlights a significant trend. We are increasingly entering the sharing economy.

Moving away from banking services is a complete revolution in technology. As these initiatives gain traction, they will cultivate a paradigm of increased efficiency, fairness, and profitability. This will pave the way for a prosperous future.

Additional content

• https://www.investopedia.com/terms/t/timeshare.asp
• https://brandongaille.com/20-timeshare-industry-statistics-trends-analysis/

Where to find me

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