Words: Ashley Rigg
Published: 26th January 2011
*Fractional pants drop
Arguably the cheapest fractional properties in Europe have gone on sale in a hotel, casino and spa resort in Bansko, Bulgaria.
According to
Fractional Life, estate agent NVS Properties is selling fractional interests in the Florimont Hotel, Casino and Spa at the foot of the Pirin Mountains for prices starting at just £2,000 for a week's share.
Good for the buyer but does it stack-up for the agent?
According to NVS director Nathan Flear, the economics of deal for investors are compelling:
“Based on research taken from various well known tour operators and booking lines and websites, the average cost to rent an apartment in this hotel is €500-600 per week. The minimum cost to own a week in this fabulous hotel is £2000 which means your investment would be paid off and you will see a return within 5 years of owning the property presuming the prices stay as they are which is at its lowest.”
With a low headline price, Flear is pursuing a Ryanair marketing strategy of promoting a headline low-price while hoping to make fatter margins selling higher-priced fractional and whole-ownership packages.
Will it work? The risk is that the strategy attracts bottom-feeders who create just as much work but spend a fraction of the money.
Mr Flear will be a busy man, but will he be a rich one? Thoughts?
Source: Global edge
User Comments
Timeshare written all over it. Either the product is worth investment in it's own right as a managed hotel unit - with costs included or it isn't.
Clearly it isn't, otherwise the hotel management company running the show would be stated, and there would be some kind of guarantees in place, as well as a statement of whether there are management fees involved.
Peter Mindenhall,
IPIN - International Property Investment Network
At £2,000 a week its sounds more like Timeshare than Fractional!
Also what is not mentioned here is the annual management fee, which will increase the time of return.
Timeshare has taught us that it as much about the ongoing running costs than the initial investment, which can cost many time more than this over the year of ownership.
Simon Wragg,
Resorts Development International
Fractional ownership is a very bad investment with literally no resale market . if the developer had a good product there is no need to dress a wholf in sheeps clothing. stay well clear . to make the point see how many buyers are there for your fractions on resale ? none !
david,
are property company
Personally I think that Fractional deals like this blur the line between Fractional and Timeshare. To me Fractional makes sense; few people use more than 6 weeks a year and with a quarter share this leaves 6 weeks for the use of family and friends. Why cheapen the product by reducing ownership like this?
Peter Mitry,
Egypt Real