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Does a Paris fractional ownership investment make sense?

Paris Building facade

If you’re looking for a real piece of Parisian real estate to call your own at a much lower cost than normal, read on. In this post, we will put aside the many reasons why Paris fractional ownership makes a lot of practical sense, and look at why it’s also an excellent long-term investment.

To illustrate, let’s compare a 1-bedroom, 50m2 apartment in an above-average neighborhood of Paris with an acquisition cost of €850,000, with a 1/13 share in the same property selling at €120,000. In both cases, we’ll assume that you’ll use it 4 weeks per year and end up selling your property or Paris fractional ownership share after 10 years.

Average Paris real estate prices vs. Paris fractional ownership prices

Average Paris real estate prices have doubled over the past 15 years and are expected to keep rising at a steady 5% per annum over the long run. This figure is widely used by most lenders in France.

In comparison, Paris fractional ownership real estate prices have not only kept pace with average Paris property prices, but in some cases, they have even exceeded them. That’s mainly due to the high demand for Parisian fractional ownership programs and the shortage of fractional ownership Paris properties on the market. 

Annual Cost of Full Ownership

Fully supporting the cost of running and maintaining a Parisian property can be costly: annual property taxes, utilities, regular homeowner’ association dues, insurance, maintenance, and general upkeep, not to mention the occasional extraordinary expense, such as façade cleaning and repairs* — all of which gets a lot more affordable once you split it amongst 13 owners, of course.  

In the example above, this would amount to approx. €8,000 per annum in the full ownership model (excl. extraordinary expenses and major repairs), vs. €2,500 for a 1/13 share, which additionally includes cleaning and laundry every week, full property management, and a reserve fund to cover any major maintenance and repairs (the latter can be a lot: A friend was recently complaining about how the façade cleaning of her building cost her the hefty sum of €20,000 last year!).

*In Paris, it is legally required to clean the exterior of buildings every ten years.

Wrapping Up

Real estate in Paris is a large investment, and while most people would prefer to own an entire apartment in Paris, it is only logical that those who are not able to purchase a whole property to their liking are more likely to opt for the fractional property instead. 

Fractional owners also find it more financially advantageous, and do not have to feel guilty about leaving a vacation home unused for most of the year anyway: with the fractional ownership Paris plan, they only pay for what they use.

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