Investors get the 'best of both worlds' with new holiday home ownership model

We all know ride-share, racehorse-share and even boat-share.

But now high-net-worth property investors are being offered a new concept: sharing holiday homes with allocated months for visits, but with their name on the title, creating a readily saleable – and hopefully nicely appreciating – asset.

Quite distinct from the old time-share model, in which purchasers obtained the right to use a home for a set amount of time with no ownership involved, this is being hailed by some as the best of all worlds.

“My wife and I were in the marine industry for many, many years and we came up with the concept of syndicates with the shared ownership of luxury Riviera motor yachts,” says John Russell of Second Home.

“So, then we decided to extend the concept to luxury homes and built a beautiful home in Queenstown, New Zealand, that we now share between six owners, so we each stay for a month every half-year. It worked so well, we’ve now partnered with a large developer on another apartment property there, while we also have a villa in Italy on the same system.”

The Second Home scheme sees investors purchasing a share of a fully managed holiday home with their name on the title, with all owners vetted to make sure they’ll be compatible.

It also offers the advantage of a holiday home, complete with a car, without the need to invest heavily in owning a property outright.

Financial planner Andrew Bennett of Signate Private Wealth examined the idea and liked it so much that he’s just bought a one-eighth, $325,000 share in the company’s three-bedroom apartment in the Jack’s Point development in Queenstown, slated for completion this December.

“We’ve always loved Queenstown and this really appealed to us,” he says. “It’s not a time share, but it’s a strata title share of a nice unit that we, our family, grandkids or friends can have access to.

“I can hear myself saying to a client, ‘Why would you do that when you might get a better return doing something else with your money and investing it carefully, and staying in Rydges Lakeland, or the Sofitel Noosa?’

But it’s very much a lifestyle decision and I think, long-term, it’ll be a fantastic investment with capital growth in the region.”

A similar model already operates in the US called Pacaso, founded in 2020 by former Zillow executives, which buys homes in hotspots like Lake Tahoe and coastal South Carolina, furnishes them and resells stakes.

Like with any property investment, however, potential buyers should do all their due diligence before signing on the dotted line, advises independent property buyers’ agent Michelle May.

It can offer a great way of buying access to a holiday home cheaply, but you need to be fully aware of the costs and ease of transaction later.

“You need to determine the likely capital growth and how much you’ll pay in levies and other fees,” she says. “You also need to ask what you want from the property.

“It might not be the best possible investment decision you can make, but then you might be happy for that compromise as it’s also a lifestyle decision.”