A UK-based fractional ownership startup that aims to make owning a second home more affordable has launched, offering the chance to purchase a share in one of four luxury London apartments.
Fractal Homes splits property ownership into eight equal parts in order to reduce the initial purchase price and share upkeep costs across owners.
Properties are held by a UK limited company.
“Fractal Homes’ platform makes it easy for buyers to own and enjoy second homes in Europe’s most desirable cities,” explained Labib Kaddoura, co-founder of Fractal.
“We make second home ownership more accessible by splitting each home into eight equal parts, reducing both the initial capital outlay required to buy the home and also the often-overlooked high cost of running a property.
After purchase, Fractal manages the property for a monthly fee.
“Fractal fully manages the property and takes care of cleaning, maintenance and all operational aspects that come with the running of a home to give our buyers a hotel-like experience,” Mr Kaddoura said.
The company also offer luxury hotel-like services during owners’ stay, managed via an app.
Owners have dibs on a minimum of six weeks stay in the property each year, according to the Fractal website, with bookings also handled through the app.
Four properties, all in London, are on offer at launch.
Fractal said it was exploring expanding the fractional ownership model to other destinations such as Paris and Madrid.
Prices currently start from £125,000 ($219,000) for a share in a Saint Lukes studio apartment.
They range to £275,000 ($482,000) for a slice of a two-bedroom apartment in Kensington.
To make the property feel more like a home, owners have the option to store their personal belongings onsite.
Fractional ownership reduces maintenance costs
As well as lowering the initial cost of purchase, Fractal intends to address the pain point of many second home owners: paying maintenance costs for a property that sits empty between stays.
“Buying a second home for just a few weeks of usage per year in addition to all the maintenance and operational hassles that come with it makes little sense to us,” Mr Kaddoura said.
“That’s one of the main reasons why we created Fractal.”
It’s setting its sights on customers from the Gulf Cooperation Council and Africa.
“Being from, and having lived in, the Middle East, we know first-hand how beneficial a second home is for individuals and families who spend a lot of time traveling between two countries for business, schooling, and leisure,” Wadih Abou Bechara, co-founder of Fractal said.
The company has already seed funding from global multi-stage technology investment platform, White Star Capital as part of a $30 million round.
There are two fractional ownership models in the market in Australia, both focused toward investors rather than the leisure market.
BrickX, a fractional ownership platform launched in 2015, allows for co-investment in residential properties via the purchase of individual shares (‘bricks’) starting from $250.
Owners can buy and sell their shares on the platform at any time.
DomaCom operates a similar fractional ownership model though its investment options stretch beyond the residential sector.