"The management puts the units into use thus earns income for the propertyÂfs owner. The management company only ensures that the unit is still in proper shape when the owner needs it."
This is advantageous to a homeowner as the property is maintained by the manager, guarded and renovated in case there are any breakdowns of the house.
However, there is a management fee that the owner has to part with. Different companies have varying payment arrangements.
Fractional ownership also allows the unit buyer a choice as to whether they want to have it as an investment to generate income or as a residential area. But Mumbo notes that he has observed that many people tend to make investment out of their units.
He says that fractionally owned units are cost effective and sustainable to the unit owners because when unforeseen circumstances such as price hikes strike, they do not affect the amount paid for management.
Similarly, when tourists flock to the Coast, since the amount paid to the owner of the unit remains constant without benefits of peaks registered during the high season.
Baobab Development Group Limited has also invested in the fractional ownership. The group, which has put up 33 units, consisting of one and two bedroomed units, at the Coast hopes to complete them by mid this year so that they can be ready for occupation.
Douglas Jackson, BaobabÂfs sales and marketing manager says fractional ownership main strength is that they allow people to buy the amount of time the want in a housing unit. He further notes that so many people build houses, which they use for some few days after which they are back at their work places, and thus the house does not have any returns to the owner.
"Fractional ownership," he notes, "involves allowing people to buy the number of weeks they need to use a housing unit every year."
A whole year is divided into 13 periods with each period having four weeks. Therefore, the bare minimum number of weeks that can be bought for any given year is four while the maximum number that can be bought is 12. The company takes one week every year for renovations and maintenance.
Jackson states that currently the lease runs for 99 years, which means if a unit is acquired, the fractional owner can use it for the number of weeks that have been bought every year for 99 years.
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