Sunny and share: the joys of fractional ownership As with any investment proposition, the proof of the pudding comes with measurable results. In the case of Rocksure's first two equity funds: siblings Alpha and Bravo closed with combined investment of £11.5 million, with shareholders on target to secure a capital gain of 20 per cent on their original subscription when the funds mature in 2014. Successors the Crystal Fund and the Capital Fund meanwhile, have since acquired a similar amount of subscriptions, enabling the funds to purchase luxury homes in, amongst other locations, the Algarve, Colorado, St Lucia and Marrakech. Of course, a diversified property portfolio counts for little if the prices of the homes are artificially high and values start to falter. But Strutt Parker, Rocksure's adviser, says properties in for example, Brazil and St Lucia have "room to grow," while properties in Provence and Canada are "even keeled." For Brad Lincoln, CEO of investment consultancy Best International, bespoke schemes such as Rocksure's represent an "innovative template" for the future growth of the sector. "Product diversification is key," he adds. We're already seeing a number of mainstream developers moving into the syndicated market. Pierre and Vacances in France for example, have holiday investment plans whereby owners lease back properties for rental. Rocksure competitor the Hideaways Club meanwhile, with a luxury property portfolio across Europe, currently has three "entry levels" for its Classic Fund, the highest requiring an initial capital sum of £250,000 with annual fees of £14,000. Shares are re-valued periodically based on the value of property stock and the demand for the shares. Adds Hideaways spokesperson Stephanie Mougin: "When a member sells a share there is a five per cent sales fee and the member receives 80 per cent of the capital gain." Market expansion is also bringing with it much needed consumer legislation. Jeremy Cobb of the Fractional Ownership Consultancy says: "Syndicated investments are a breed apart from conventional real estate purchases. Selling shares in a property is much more complex than a straightforward resale, with share promotion legalities and transfer duty issues to take into account, plus there's the issue of planning a workable exit strategy. Like any emerging product there are good and bad examples - so specialist advice is essential. Tips for buying Buyers should have contracts checked to ensure that they are receiving a clean equitable stake in individual properties with no restrictions on selling fractions on the open market, apart from, perhaps, having to offer co-owners first right of refusal. Property taxes, insurance, and maintenance should be outlined in the deed of sale, with a full property management service included in the purchase. Expect service fees to vary per scheme with a benchmark of £2,000-£4,000 per annum, plus a contribution to a "sinking fund" to cover incidental expenses. A new European Fractional Ownership Directive was introduced in February 2011. This legislation applies not only to properties being marketed on a fractional basis in the EU, but also to properties outside the EU which are being marketed to EU residents. Three of the best St Lucia - Freedom Bay Set in 77 acres of tropical rainforest (part of a UNESCO listed World Heritage site) at the foot of the iconic Twin Pitons, this low-density, high-design development is managed by the award winning Six Senses Resorts and Spa Group. Onsite leisure amenities include a diving school, tennis courts, and wellness centre. The fractional ownership model offers weekly shares for personal usage or a rental option that carries an eight per cent rental guarantee for up to three years, followed by 50 per cent of villa occupancy income. Prices for one week in a one-bed villa start at £20,000. Annual management fees (personal usage only) average £770. www.bestinternational.co.uk Paris - 8th District Located on the tranquil, tree-lined Rue Robert Estienne, close to the Champs Elysees, this two-bed Haussman-era pied-a-terre covers 73-square metres of traditional living space complete with parquet floor and original mouldings. Mod cons haven't been overlooked either, with a designer kitchen, HD TV, high-speed Internet and iPod docking stations. Shares based on a one quarter fraction (13 weeks' annual usage) for a tenure of eight years cost £285,000. Annual service fees are £3,400. www.co-investir-paris.com Portugal - Pine Cliffs Just a thirty-minute drive from Faro Airport, this serene and green five-star estate comprises a combination of residential homes, hotel and beach and golf club, all managed by the Starwood Hotels and Resorts Group. Property owners have access to a generous portfolio of benefits including membership of the Pine Cliffs Golf & Country Club. Fractional ownership offers investors a 1/13th share (four weeks usage per year) in a fully-furnished property for a tenure of 26 years. Prices start from £110,500 for a two-bed townhouse rising to £155,000 for a three-bedroom residence. Annual service fees average £2,300. www.pinecliffs.com Tricks and Mortar: The Little Book of Property Wisdom by Laura Henderson is available now from all major booksellers and online retailers.