1 Presents: FRACTIONAL TITLE An exciting new concept in owning your own...
2 Contents: Page: 1. Introduction 3 2. Overview 4 3. The Fractional Title Concept 5 4. Benefits of Fractional Title 6 5. Cost analysis 7 6. Procedure to buy 9 7. Financing the investment 10 8. Properties 11 9. F A Q 12 10. Conclusion 16 11. Expression of interest 17 12. Contact us 20
3 1. INTRODUCTION Ever driven past a Real Estate Property in a beautiful setting that seemed so idyllic, so wonderful an absolute paradise? You thought the only thing missing in that picture was YOU! An unreachable dream?? NOT ANYMORE! Now YOU can own a piece of that paradise. Piece of Paradise Holiday and Lifestyle Investments offers you the opportunity to make that picture complete and own a Fractional Title in a holiday property or experience the Lifestyle of tailor made residential opportunities!
4 2. OVERVIEW Do you want a luxurious second home but can t justify the high cost of ownership and maintenance of something you would only use a few weeks yearly? Do you want a sound property investment with full title and capital growth on your investment? Then FRACTIONAL TITLE is for you!! This is your once in a lifetime opportunity to own your own piece of paradise in our luxurious, fully furnished, residential properties for a fraction of the costs.
5 3. THE FRACTIONAL TITLE CONCEPT Fractional Title is the collective ownership of an asset where individual investors receive full title of their share in the property. You own a portion of the asset, or as we like to call it, a piece of paradise! Fractional Title fills the gap between whole ownership and timesharing bringing you the best of both worlds! The concept of Fractional Title allows a number of investors to collectively purchase and own a holiday home. Owners typically purchase a portion, usually between ¼ share to 1/13 share, giving you a number of weeks per year. Investors have a use agreement determining rights and responsibilities of Property Interest Holders. A management agent is appointed by the investors who manage the property on behalf of them. Investors also make monthly contributions to a levy fund out of which all costs and expenses of the property is paid. Thus you have the benefit of a second property without the hassles.
6 4. BENEFITS OF FRACTIONAL TITLE By investing in the fractional title concept with Piece of Paradise Holiday and Lifestyle Investments, you have the following benefits: Asset appreciation/capital growth on your investment You legally own a portion of the asset Title in the investors name More affordable and better value for money, because investors share the costs and use the property for 4 weeks a year A more cost effective way to stay in desirable locations The property is managed on behalf of the investor A hassle free holiday where we take care of the property There is a central reservation system You can let your underutilised weeks Flexibility with an exchange facility with other owners in the same property There is also an exchange facility with owners of other properties managed by Piece of Paradise Holiday and Lifestyle Investments, bringing you the possibility of different locations Lower maintenance costs, because the costs are shared Can be sold like any other property investment
7 5. COST ANALYSIS Generally speaking it can cost you anything between R1 000 000 and R3 000 000 to purchase a holiday home and furnish it. You will then need to secure, manage, maintain and make your investment work for you whilst you are not on vacation a daunting and costly experience! On the other hand your investment in fractional title allows you a second property investment, cost effective holidays and up to 4 weeks relaxation in idyllic settings each year. Piece of Paradise Holiday and Lifestyle Investments brings you investment opportunities for a fraction of the cost. Depending on factors such as the destination, the finishes, the security and the size of the property, prices may range from R75 000 to R140 000 (registration costs included). There are also important calculations in determining if you really buy value in the fractional market. So do the following calculations and put us to the test! (Keep in mind that we are the only fractional provider that gives you full title deed): 1. The Real Estate Value the multiple calculation Take the asking price of the fraction and multiply this with the total number of fractions in one residence or apartment. The total amount should not exceed 1.5 to 2 times the price you would pay if you were the only owner of the property.
8 2. The usage Value the payback calculation Take the rate you would pay for similar accommodation in a fully serviced hotel, offering the same standard and quality of service. Multiply this with the number of days of your annual usage right. You now have an annual value. Deduct from this value the annual levy. This gives you the adjusted annual value. Take the purchase price of the fraction and divide this by the adjusted annual value to arrive at a number of years you will take to pay back your initial purchase price. Globally this pay back is between 4 to 7 years a return of investment between 15% and 25%. 3. The likelihood of capital appreciation As the underlying fundamentals of this product are real estate and hospitality, check whether the product is sold in a market where there is a rising property and hospitality market. It is essential to ensure that the product is a deeded product and the usage rights are in perpetuity(eternity). Piece of Paradise Holiday and Lifestyle Investments provides you with investment opportunities within these important financial considerations. Based on the expected increase in the property value, the bare minimum is a means of recouping your holiday expenses after a maximum of 7 years if you would sell.
9 6. PROCEDURE TO BUY To secure your own piece of paradise it is essential that you indicate your interest to us by completing and submitting the expression of interest form. You can also contact us via e- mail, fax or telephone. Personnel of the Corporation will then answer any further questions you still might have. If you should decide to make a smart investment AND go on holiday, a contract, use agreement and other supporting documents will have to be signed and delivered to our attorneys. The attorneys will then be in contact with you until the property interest you have bought is registered unto your name at the Deed s Office. This day you can mark on your calendar you now have your own piece of paradise! Hereafter you can enjoy the property according to the use agreement and roster. We are there for you every step of the way in this exciting and rewarding investment experience!
10 7. FINANCING THE INVESTMENT The purchase price of your Property Interest can be financed on a loan basis. You can access the equity available in your existing home loan. Finance can also be arranged through a tailor made package linked to the prime interest rate with a deposit. You are also welcome to buy cash.
11 8. PROPERTIES Piece of Paradise Holiday and Lifestyle Investments is creating a unique market where we combine the following: Property Market Leisure Market Lifestyle Market all within one concept where you can, at a fraction of the cost, enjoy full title co-ownership, lower maintenance and hassle free usage. Our properties are all fully furnished and current and future properties are in/will be in sought after areas such as the Garden Route, Cape Peninsula, mountain areas of the Eastern Free State and the area in close proximity of the Kruger National Park. We even plan to add international destinations to our properties in the future.
12 Piece of Paradise Holiday and Lifestyle Investments take pride in selecting, furnishing, promoting and managing each property on behalf of you, the valued investor, in your own piece of paradise. 9. F A Q How much does a fraction cost? Depending on factors such as the destination, the finishes, the security and the size of the property, prices may range from R75 000 to R140 000 (registration costs included). Can I exchange my weeks with other owners? Yes, an exchange facility is available for owners within a specific property at no extra costs, subject to availability of weeks for exchange. Who manages the property? Piece of Paradise Holiday and Lifestyle Investments is the management agent of the property and looks after the property on behalf of the co-owners according to the use agreement and management rules. The agent report back to Property Interest Holders at a general meeting.
13 Is the property furnished? The property is fully furnished and decorated incorporating the latest trends. This includes crockery, appliances, entertainment- and electrical equipment, as well as linen. Who does the maintenance work at the property? The management agent of the property has agents responsible for each property that see to the maintenance of the property and it s contents. What do I buy? You buy a property interest in the property. You became a co-owner and have full title of your undivided share registered in the Deed s Office in your name. What is the difference between timeshare, fractional ownership and fractional title? With timeshare you own the time (usage rights). Fractional ownership lets you own a portion of the asset held in the name of an entity, usually a company that gives you shares. Fractional title on the other hand gives you full title of the Property Interest you hold in the property, which is registered in your name in the Deed s Office. How is the upkeep of the property and its contents financed? Each Property Interest Holder contributes monthly to a levy fund. Piece of Paradise Holiday and Lifestyle Investments maintain the property and its contents out of this levy fund. It also makes provision for replacements. The levy amount is determined by the coowners yearly on a general meeting. What happens if a co-owner does not pay the levies? If a Property Interest Holder is in breach of the use agreement, the management agent can act according to remedies specified in the use agreement.
14 Who are the other co-owners? The other co-owners of the property will be investors such as yourself. Once all the Property Interest s have been sold, each Property Interest Holder will receive a Property Interest schedule with the names of the other co-owners. Property Interest Holders will meet at an annual general meeting. Will the property be serviced when I go for my allocated weeks? The property will be ready for occupation when you arrive, and be cleaned again after your two-week stay. This includes the cleaning of all linen. Inventory will be taken upon arrival and again before you leave. These costs are included in the monthly levy. There is a refundable key- and breakage deposit payable. The cost of extra cleaning in-between weeks can be arranged, but then at the expense of the occupant(s). How does the Time Roster work? The property will be sold to 12 different buyers, each holding a Property Interest, and receiving 4 weeks usage yearly (Piece of Paradise Holiday and lifestyle investments keeps one fraction per property for the purposes of maintenance/refurbishing). The weeks are divided into 2 weeks for the first half of the year, and 2 weeks for the second half of the year, making 4 weeks in total. The reason for that is that every Property Interest Holder can enjoy a summer-, as well as a winter brake-away. Every Property Interest Holder gets different weeks each year for 13 years. In the 14th year you will receive the same weeks as in your first year of owning the Property Interest. Can I sell my Property Interest? You can sell your Property Interest with the greatest of ease. You have to give the other co-owners 2 months written notice of your intent to sell. The existing Property Interest Holders then have 30 days to buy the Property Interest at the sales price, if they are interested. If no one takes up the offer, you may proceed to sell on the open market. Can I let my weeks? Yes. You can place your annual weeks into the rental pool. Piece of Paradise Holiday and Lifestyle Investments can find you holiday makers at a 10% fee of the rental amount (servicing of the property is already included in the fee as well as all advertising and administrative costs).. You can also introduce holiday makers to us for your weeks, in which case Piece of Paradise Holiday and Lifestyle Investments will charge a fee of 5% of the rental amount for servicing the property for the holiday makers. To safeguard all Property Interest Holder s interests all letting will be handled by Piece of Paradise Holiday and Lifestyle Investments.
15 Can I buy more than one Property Interest? You are more than welcome, but only up to a maximum of three Property Interests to avoid majority control. Will linen, furniture and appliances be replaced on a regular basis? Due to wear and tear, linen will be replaced once a year. Provision will be made for the replacement of furniture and appliances on a 7 year term but will be replaced if necessary. Will I have any say in the management of the property? Piece of Paradise Holiday and Lifestyle Investments is the management agent who manages the property on behalf of all Property Interest Holders, according to the management rules and use agreement. Property Interest Holders have a say in the management of the property at the annual general meeting where financial statements will be submitted, levies approved and operations discussed. Are Capital Gains Tax (CGT) payable? Yes. The standard rates of CGT are applicable. E.g. you have purchased a Property Interest at R400 000 and sell it for R600 000, with the capital gain being R200 000. If the seller is a natural person, R15 000 of the capital gain is exempt. Thus 25% of R185 000 will be added to your personal income tax rate. The tax payable will be R18 500. If the seller is a legal persona the following applies: 50% of the capital gain is taxable at 29% The tax payable is R29 000.
16 10. CONCLUSION Piece of Paradise Holiday and Lifestyle Investments sees the future of holiday making in: Owning your own piece of paradise in a sought after location. A secure investment by co-owning a prime property with full title in your name at a fraction of the cost. Hassle free holidaying in a property managed on behalf of you. The possibility of capital appreciation of your investment and realising an income for weeks not utilized by yourself. Flexibility through the possibility to exchange with other owners in the same property or with owners of other properties in other destinations. Make this investment with us and you will have a home away from home without the hassle a real piece of paradise!
17 11. EXPRESSION OF INTEREST This is your change to invest in a piece of paradise! Please fill in the following and take the first step. This is an expression of interest only and you are not obliged to purchase anything. Enter your details: Full Names: Surname: E-mail: Home number: Office number: Cell number: Fax number: Postal Address: Town: Province: Country:
18 Is there any specific property that you are interested in? (View properties offered on our website www.pieceofparadise.co.za) Yes Please describe No, Any Please indicate the type of property investment you are looking for in order for us to match existing properties or to plan future developments: Holiday Investment Type: Beaches Golf and Leisure Game Farms Fishing Mountains Wine lands Other: Please specify Other destinations in Africa: Please specify Overseas destinations: Please specify Type of Holiday Homes: Property Type: Any Free standing Home Duet Town House Apartment Estate Bedrooms: 2 3 4
19 Parking: Parking Bay Shaded Parking Bay Carport Garage Double Garage Undercover Parking (e.g. basement) Entertainment Facilities: Braai area Pool DSTV Other: Please specify Nearby Facilities: Airport Golf Course Shopping Malls Other: Please specify Hobbies and other interests: Specify: 1. 2. 3. 4. 5.
20 12. CONTACT US E-mail: info@pieceofparadise.co.za Tel: +27 79 5089 892 Fax: 086 602 7319 Website: www.pieceofparadise.co.za Make your dreams come true invest in your own piece of paradise...