You may have recently browsed through glossy brochures with photos of luxurious resorts, set amid sandy, crystal clear beaches and exotic rainforests in beautiful tropical locations such as Phuket or Bali, and may have been immediately excited about the prospect of having a luxurious villa to visit several times a year for a seemingly small sum. But before you set your mind set on the holiday home of your dreams, do stop to understand the different ownership options available, so that you can pick the right choice that best suits you and your family’s needs.

A holiday home in tropical paradise

1. Timeshares

Timeshares have been around for a long time, hence it should not be surprising that many Singaporeans are most familiar with the concept of buying a “right” to use a property which lets them travel around the world. Timeshares have the advantage of offering life membership, and they also allow users to travel frequently to a favorite resort at a cheaper rate than they would get by booking it through normal routes. However, one drawback of timeshares is that they are often sold on a “right to use” basis, and sharers do not actually own the actual property itself. It can also be difficult to get a reservation at a timeshare resort during the peak seasons, such as Christmas and Chinese New Year.

2. 2nd Homes

With the rapid rise of local property prices in recent years, Singaporeans have started to look overseas for more value-for-money housing options, where, for the price of a 3-room HDB flat, they can buy a spacious 4-bedroom bungalow in a gated community enhanced with 24-hour security. In particular, Iskandar Malaysia, with its rapid economic development and close proximity to Singapore, has been growing in popularity with locals looking for a weekend or future retirement home. But although 2^nd homes offer many benefits, one concern is that buyers are limited to spending their holidays at the same place over and over again, which may not be suitable for those who like to travel to a different place every year.

3. Fractional Ownership

Fractional ownership programs are relatively new to the local market, and have evolved in response to the demand for an alternative to timeshares and 2^nd home ownership. The concept is simple: the ownership of a villa or resort home is broken up into “shares”, in such a way that each owner may own 10% of a resort home, sharing an equal ownership with 9 others. While owners of a fractional share can benefit from the appreciation in value of the property, buyers should be sure that they intend to re-visit the same location over and over again, and that they are sure that that specific accommodation is what they are looking for.

A winter holiday home

4. Shared Ownership

For those looking for the flexibility of having various holiday locations to choose from, but who also want to benefit from the capital appreciation which 2^nd homes and fractional ownership programs offer, a shared ownership program may be the answer. One such program, the Hideaways Club, allows investors to buy into a property investment fund, under which shareholders retain full ownership of the various properties held under the fund. Investors also become members of a private Member Club, which allows them to use any of the properties throughout the year.

As shared ownership programs allow investors to diversify their property investment portfolio across a wide range of geographical markets, they provide an appealing option to those looking for the combination of investment with a luxury jet-setting lifestyle. However, as shared ownership is a relatively new concept, buyers should do their research on the overall demand for resale shares of the specific fund, so they have a good understanding of the potential gain or losses of their investment – before taking the plunge.