Fractional Ownership Of A Holiday Home In Australia: FAQs
November 16, 2022 • Co-Ownership 411

Kō has partnered with high-end buyers agency, Propertybuyer. As part of this exclusive partnership, Propertybuyer is sourcing and vetting luxury homes in prime, Australian holiday locations that are suitable for Kō-ownership (fractional ownership). You can learn more about our partnership here.
In this article, we share some of the questions the team at Propertybuyer often get asked by owners and agents interested in fractionalising their home and listing it on the Kō platform.
For holiday home owners, the Kō platform offers the opportunity to sell all or part of your home and use the equity for other holiday homes or investments. The fractional ownership model has many benefits including sharing ongoing maintenance costs, accessing a holiday home at a fraction of the usual cost and unlocking equity.
Propertybuyer is Australia’s most awarded buyers agency and is interested to hear from both agents and owners that may be considering selling prestige holiday homes in highly sort after holiday locations around Australia. Are you an existing owner, or real estate agent in Australia interested in learning more? Reach out to Propertybuyer here to connect with one of their agents.
Watch a recorded webinar featuring Rich Harvey from Propertybuyer, to learn more about Kō and our model.
Selling Process
- We have an initial discussion regarding your property and your intentions with the property. Assuming we proceed, we sign a platform listing agreement, giving us the right to market your property and that you commit to selling the property into a co-ownership model on the terms we agree upon. This includes the listing price, the number of 1/8th shares ideally sold, and the minimum number of shares sold before we initially “trigger” the property to fractionalize. If necessary, we will do an initial Due Diligence of the property and potentially a site inspection.
- The property is listed on our site, and we work with agent partners to find the appropriate buyers. At this point no legal changes have occurred, merely the sales and marketing efforts have commenced.
- Once we have the minimum number of buyers required to fractionalise the property, it is transferred into a unit trust, and you as the owner are at the moment the 100% owner of that unit trust. Given we already have buyers committed and placed cash in trust, the respective units are immediately sold to the incoming buyers and you as the owner of the units receive those funds.
- If there are still outstanding shares you still wish to sell (either then or further down the road) we will continue to sell them on your behalf. This could continue until you sell your entire stake in the property, if that ever occurs.
We only list a curated selection of holiday homes that have the clear potential to sell, at pace, into the co-ownership model. For more information on the properties’ location and features we look for, click here.
Ideally, Kō has an exclusive period for sale, negotiated with the owner, but this is flexible.
Ideally, we require access to quality photography and videography of the property to create the marketing material and market the property. If this material isn’t readily available or unsuitable, our content team will coordinate necessary photography/videography and draft the marketing material to support the sailing process.
This is negotiated with the existing owner. Our standard is that 25% of the property (2/8) is sold and the funds are in escrow before fractionalising the property.
This is negotiated with the existing owner. Our standard is that 25% of the property (2/8) is sold and the funds are in escrow before fractionalising the property.
Kō continues to work with a listing agency to sell any outstanding units the existing owner wishes to sell.
Kō will also follow the same process for the resale of unit for any co-owner, listing the unit for sale with a partner listing agent at the price the owner wishes, if no existing co-owner in the property wishes to purchase the unit.
Divorce
Similar to any other asset, this would be settled between the parties. From the perspective of the trust and trustee, whoever is listed on the trust deed is the owner and is explained in our unitholders agreement/trust deed.
Bankruptcy
Similar to any other asset or financial product, the unit of the property can be sold in a bankruptcy scenario. This is managed by Kō and the independent trustee (Quay Fund Services) and is explained in our unitholders agreement/trust deed.
Mortgage default
Similar to a bankruptcy situation, Kō and the trustee have the right to sell the unit(s) of the property in a default scenario. In that instance, the Kō-owner would receive the remaining funds, net of any expenses outstanding.
Minimum Operating Budget
As the Asset Manager, this is Kō’s responsibility. This includes operating expenses as well as a reserve/sinking fund to cover capital expenditures.
The owners receive full visibility over the budget and expenses. It is Kō’s value proposition to provide greater visibility on the operating costings than an individual normally has with their own primary residence, as each property is treated very similarly to a company with its own balance sheet and P&L.
Fees
Please read our guide to understanding co-ownership costs here to learn about our cost structure.
Following the above, Kō does not charge a premium on any of the ongoing operating costs. However, there is a flat platform fee of AUD$150/month per owner (regardless of the size of ownership in the property) to manage bookings and finances.
Due Diligance Reports
A Property will go through a full Due Diligence before transferring, similar to any traditional real estate transaction.
Fittings & Furnishings
“Turnkey” properties that are furnished and styled are preferred, as they accelerate and simplify the sales process.
If this is not the case, Kō can facilitate a designer quote that would draft a concept and costing which would be included in the sales price and executed after transfer.
Platform Committment Agreement
Our standard is 6 months, but this is flexible and based on negotiations with the owner.
Financing
Kō are in discussions with lenders to provide financing. Details around financing options will be provided with each property.
Renting & Short-Term Leasing
This is property specific. Given most properties are near major urban areas and are utilized +80% by the owners, a property is not normally available for rental. However, if a property is deemed to have significant rental potential, we can integrate a rental component to offset costs for the owners. Kō manages this on the Kō-owners’ behalf and Kō-owners are not allowed to rent the property out on their own.
Kō manages all bookings, including rentals.
That is incorporated into the features and benefits of each individual property when brought into the market. Most “high-end” properties will not have a rental component, but properties in areas with high rental potential may be considered to have a rental component. Kō looks to provide a variety of rented and non-rented properties as some owners prioritise offsetting costs while others prefer privacy.
THIRDHOME
We advise Kō-owners to exchange any used time in THIRDHOME. However, if, at the end of the year, there is unused time for the calendar year, it is lost time.
Property Management
Kō partners with local property managers and coordinates a property management agreement on behalf of each individual property trust. Kō will also evaluate and replace property managers if the property is not maintained in good standing. In early 2023, Kō will have its own owner mobile App to allow owners to book their time but also evaluate their experience during their stay, to ensure the experience is meeting their standard.
Insurance
Similar to any of the other operating components, Kō coordinates insurance that is approved by the independent trustee to ensure there is adequate insurance for the value of the property and its contents.
More Questions?
For more details, please download the Information Memorandum here or contact us.
Any information or advice contained in this blog is general in nature and has been prepared without taking into account your objectives, financial situation or needs. Before acting on any information or advice in this blog, you should consider the appropriateness of it (and any relevant product) having regard to your circumstances and, if a current offer document is available, read the offer document before acquiring products named on this website. You should also seek independent financial advice prior to acquiring a financial product.
All financial products involve risks. Past performance of any product described on this site is not a reliable indication of future performance.
Ko Homes Pty Ltd is the Investment Manager of the Ko Homes Trust. It holds a Corporate Authorised Representative authorisation CAR No.1298188 from Quay Wholesale Fund Services Pty Ltd (Quay) (AFSL No. 528 526). Ko Homes Pty Ltd also holds a Corporate Authorised Representative authorisation from Quay allowing it to provide General Product Advice.
You Might Also Be Interested In

May 31, 2023
Unleashing the Benefits of Co-ownership! All the Fun for a Fraction of the Total Cost
Co-Ownership 411

May 19, 2023
What to Expect When Selling Your Share in a Kō Holiday Home
Co-Ownership 411

May 3, 2023
Is Your Home a Kō Home? Why Others Choose To Fractionalise Their Luxury Holiday Home
Co-Ownership 411
Stay Updated
DON'T MISS OUT ON THE LATEST LISTINGS
I give Kō permission to contact me & agree to the terms. This site is protected by reCAPTCHA and the Google privacy policy, terms of service and mobile terms.