A Canadian company called ‘FOHO.Haus’, which is promoted by a Goan origin entrepreneur, Vijay Thomas, has recently introduced the concept of fractional ownership of real-estate to people in Goa and other parts of India. Now, people can buy a share in the second home in Goa by paying a fraction of the price of the property. The company thinks that fractional ownership of real-estate can revolutionize the second-home market in India
Karan Sehgal
In this modern-day and age, when people prefer taking an Uber or Ola cab rather than owning a car and they prefer working out of a co-working space as opposed to having their own office, the message is clear that people don’t like investing in an asset more than the utility they can derive from it.
Why then would they like to invest lakhs or even crores of rupees in a real-estate, if they aren’t living in it and aren’t even renting it out? However, there are many Goans, who have a second home in the State, but they live in Mumbai or Delhi or out of India.
They hardly spend time in Goa and don’t even let it out. In such a case, they have made a bad investment. The investment may be bad but no one can deny that there is an incredible appeal to the idea of owning a second home in Goa. This is where FOHO.Haus has stepped in by introducing fractional ownership of real-estate to people in Goa and other parts of India as well. A lot of people, who spend 3-4 weeks every year in Goa. Rather than buying a second home, they can buy a fraction of ownership in that home, which allows them to stay in it for 3-4 weeks.
FOHO.Haus is promoted by Canada-based Tangentia Ventures. Interestingly, the founder & chief executive officer (CEO) of Tangentia is a Goan origin entrepreneur named Vijay Thomas. He said, “We are not into buying real-estate. We are bringing sellers and buyers on one platform so that people can buy real estate on a fractional basis. We are creating a mass market for properties online using our IT expertise.”
The interesting thing about FOHO.Haus is that although it is a real-estate business, the focus of the promoter is to offer a genuine platform to the buyers and sellers and not to build a flat or a house. The fact that Tangentia is a technology firm focusing on artificial intelligence (AI), cloud computing and blockchain, will help Thomas in building a platform.
Thomas said, “For example, there are Goan origin people in the UK. They have properties back home. They come on a vacation to Goa just to register their property, which is time-consuming. We will insulate customers from a lot of hassle by incorporating things like blockchain, smart contracts, etc. Real Estate business has got a bad name for a variety of reasons. We will give confidence to the buyers.”
So, how does the model of fractional ownership really work? FOHO.Haus allows people to buy a second home in Goa at one-twelfth the price. Actually, there are 12 buyers of a property and by doing so they get a right to stay for 3-4 weeks every year in that property. But why 12 buyers and why not more or less?
Thomas replied, “We are focusing on people willing to invest in a second home in Goa. Our research shows that they spend on an average 3-4 weeks a year in Goa. Let’s take 48 weeks in a year and there would be 12 people willing to stay for 3-4 weeks each in a real estate. That’s how we arrived at the number 12.”
“Once these 12 individuals buy ownership in a property, it is registered as a private limited company. The buyers will be its shareholders. Such companies will have regular audits, registrar of companies (ROC) clearance etc. In effect, there will be a much higher level of compliance,” he continued.
The owners of fractions in a real-estate may or may not know each other just as individual shareholders in a company often don’t know each other. Thomas further informed that FOHO.Haus will manage the properties and will ensure the highest possible standards. If they wish, the owners will also be able to rent out the properties for a few days to tourists and earn an income.
Currently, FOHO.Haus is offering fractional ownerships in 2 BHK and 3 BHK properties in Aldeia de Goa at Bambolim and also in villas in Siolim. The company also has properties in Cochin, Trivandrum, Delhi and Mumbai, where it offers ownership to potential buyers on a fractional basis.
Thomas informed, “We are investing in a property in Sri Lanka as well, where the property is under construction. But, we are buying properties only initially so that we can show confidence in our business model to people.” Over the next three years, the company plans to have 100 properties in India, Sri Lanka and the Maldives.
Essentially, it will be having 1,200 owners of those properties. The concept of fractional ownership has seen interest from a lot of people, as Thomas informed that people in IIT Alumni Association in the US are also very interested in the concept.
How fractional ownership of real estate works at FOHO.Haus
FOHO.Haus has provided a platform so that buyers can purchase fractional ownership in second homes
There are a lot of people, who want to buy a second home, but don’t want to invest that much FOHO. Haus’ research shows that a lot of such people spend 3-4 weeks every year in Goa
This means 12 such individuals can come together to buy a property by taking a fractional share in it and get to spend 3-4 weeks in Goa still in their own a second home
The ownership of such individuals in a property will be registered as a private limited company. It will have compliance like regular audits, which will bring in transparency
FOHO.Haus will manage the properties and will ensure the highest possible standards
