Panaji. As the sluggishness is creeping in real estate market due to current economic slowdown, Tangentia Ventures, a Canada-based company, has come out with a concept of Fractional Ownership Holiday Homes (FOHO). Speaking to UNI, on the sidelines of Vibrant Goa Expo and Summit, Vijay Thomas, founder and Chief Executive Officer of Tangentia Ventures, said,'FOHO was an idea that came from Our venture-division, a department that helps build new idea we later invest in. We began work on this idea about a year back but It took us time to finalise our final product and its workings.'
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Explaining the concept of FOHO, he said,'If a house costs Rs two crore, we bring 12 people in who are interested and wish to purchase it as a second home. They collaborate and invest in it, thus their share of pay is less than Rs 20 lakh. For Rs 20 lakh you own the house.' He said statistically, most owners of second homes tend to stay in their second homes or holiday homes for not more than four weeks and he though vision of his company can see that clients do that at cheaper cost.
'You would pay only a twelfth of the total amount for the ownership and choose your weeks accordingly, and we deal with everything else. It could also be described as something like a timeshare owning but in a timeshare you don’t own the underlying property you only own a share in it. The owner owns the property and if the property prices increase, the profits are enjoyed solely by the owner. In our system, if the property value goes up, the house user who is also the owner of it, gains capital and thus makes a profit,' he said.
When asked where did the idea of FOHO.Haus pioneer, Mr Thomas said, 'Today owning a second home is very aspirational. People want to have a second home but not many can own a second home because a second home is also very expensive. There is also a high risk to it. In conclusion to this statement paying for the whole year when you are actually living there for only a few weeks is too of a loss. With the fractional ownership model, you pay for only four weeks a year and you are also, a fractional owner.'
On dealing with doubts potential clients may have in view of scams prevalent and market fluctuation, he said a more robust system was prevalent in FOHO which was treated as a private limited company and controlled under the policies of the registrar of companies.
'There will be audits every year. so the whole system is on the right side of the law. We have ensured that there is more compliance than required. We do not see ourselves as short running clients. We are here for the long run. In India with its population. In terms of risk, if anyone wants to get out, we are promising a buy back too. This means that if anyone, for whatever reason, wants to withdraw their ownership or doesn’t agree with something, we have so much belief in our product that we are saying and guarantying a buy back. So in essence, we are delivering second homes with democratic policies, or you could also say we are democratising second homes,' he said.
When asked was it safe to assume that FOHO had completely eradicated the risks that occur in the real-estate sector, he said,'Not completely! We’ve insulated it by 75 per cent. So if you are buying a property with a payment of 10 crore and if at any point the owners want to exit, they can do so and earn a higher return depending on the market price. If for some reason, if this does not happen, that is no one is interested in purchase, we guarantee our client, we will buy it back at 75 per cent of the price.'
'We are selling to two sets of audiences. One set, are those people who already own second homes and want more. You can have one in Kerala, one in the Maldives, one in Sri Lanka, one in in Goa, Delhi and Mumbai for the price of own home. Why not buy more homes for the price of one? The second segment of people are those who don’t own a property or send home as such and have no experience. We can help them in getting a second home but for a fraction of the cost. I would say there is bigger risk in investing in a whole house, than investing in ten houses,' he said.