How second homes co-ownership can accelerate the shift to a flexible lifestyle.
It may sound strange for many people, but one of the biggest ways that people waste resources (from capital to land, to ongoing costs) is second homes. People buy second homes (at great cost, usually) in order to use them only at a small fraction of their time - maybe 10% of their time or something around that.
This was always probably the biggest misallocation of resources, until 10+ years ago when Airbnb came to fix this problem. They offered second home owners a solution that minimized the problem: give us your unused space and time and we will help you make money out of it. And that’s how a huge industry was created.
But I think this is a mediocre solution. The villa rentals industry that became gigantic through the last 10 years still comes with a lot of problems. The income for the owners is not that big, it just makes up for some of the costs the owners have to pay to maintain their homes - from taxes to cleaning, to repairs, there are so many costs associated with owning a home. Not to mention other Airbnb-related problems like getting complete strangers into your home which means many times they won’t respect your property as you would as an owner.
Currently, there are more than 100 million second homes globally, about 15 million of them just in Europe. That’s a huge misallocation of resources waiting to be solved.
Our team has decided to address this problem and help the world become a more efficient place, but most importantly, help people buy their second home at exactly the price they will use it for, and dedicate their energy just to enjoy this home without all the hassles associated with it. We are launching the Flyway service for this, and here’s how it’ll work:
We buy second homes in the most desirable destinations where people want to spend their leisure time with family and friends. We furnish and apply modern design to them and then put a Limited Liability Company (LLC) as an owner to the house. We split the LLC’s ownership into 8 shares and then start selling each share individually.
So let’s say, for example, Flyway buys a second home in a great destination that is worth 1 million Euros. Whoever wants to have ownership and access to this property can buy one out of eight shares of this home for just 125 thousand Euros (which is 1/12th of the home’s total value). Buying one share secures access to the home for 1/12th of the calendar year, which means, 30 days every year. And this is approximately how much time an average family wants to access their second home throughout the year. Do you need more time? You can buy more shares.
As soon as Flyway sells all 12 shares for each particular home, it switches to the role of program manager: we manage the property and make sure that every time an owner with their family checks in the house they find it in perfect condition and have nothing to do but enjoy it.
What I present above is nothing more than the traditional model of co-ownership (plus a fully managed property), so nothing radically new. But, one of the reasons why second home co-ownership hasn’t worked until now was because it was extremely hard for the co-owners to agree on who gets access to the home and when. This many times led to disagreements and arguments, which led people to avoid co-ownership.
Flyway is solving this problem by providing all co-owners with the Flyway app. Through our app, owners will be able to schedule their stays at the house in a fair and equitable way. Using a set of rules and algorithms, all owners will have a sense of fairness about accessing their second home. This article explains in detail how these rules work.
Not only that, but through the Flyway app owners will have access to all the home’s ongoing costs in a very transparent way. As a property manager, Flyway will take care of all maintenance and upgrades (from cleaning, to pool cleaning, to gardening, to repairs, to taxes, etc) and pass all these costs to the owners with no margin, at cost, who will then pay 1/8th of these costs monthly, for each share they own.
Is this a Timeshare?
In one word, no. The differences between a timeshare and the Flyway service are many, but the most important is this: With timeshare, you buy the right to use time, usually at a hotel or resort. If the hotel or resort goes out of business you remain with nothing, because you don’t really own anything.
With Flyway you buy real estate. The share you buy represents a part of the home’s market value, which you can sell any time you want getting appreciation in the home’s value over time - if the home’s value goes up, you make money, if it goes down, you lose money, that simple.
But the most important differencial is that with Flyway you buy a residential property. It’s a home inside the city you frequently travel to. It is a place where you can become part of that city and its life whether it’s business, leisure, shopping or other.. Exactly what everyone expects from their pied-a-terre.
Can you only buy one share?
No. You can buy 1, 2, 3, or up to 6 shares, and each additional share will give you 30 days of access to the home each year. If you want more than 6 shares (which represent 50% of the home’s ownership) then we suggest you buy the whole home.
But here are other smart scenarios: you could buy one share at 3 or 4 different homes and get access to different destinations. For example, a share in London, a share in Paris, and maybe a share in Athens. So essentially, you will have bought much less than one full home’s worth of the price, and still, own and access many amazing second homes in so many different places!
And this, I think, will extend even further the new flexible lifestyle that emerges post-pandemic. More and more people are moving to remote work or spending a considerable amount of their time working remotely. And I think that people will use this opportunity to work from amazing places while they don’t spend their money in renting them - which is a huge waste of capital over time if you do this systematically.
This is an offering that makes much better use of our capital and savings. But most importantly, I think it will develop into a paradigm shift in the way people spend their time, work, connect with their families and with local communities.
How will Flyway make money?
After we buy and flip the house, Flyway sells each share (1/12th ownership) at the price we acquired it, plus a 12% commission. So, in the example above, a €125 thousand share of the €1 million home will cost each buyer a total of €140 thousand.
On top, Flyway will charge €99 each month to each share for managing the property and making sure everything works properly and owners have an amazing time in their home without having to worry about anything at all.
Real Estate Agents
Flyway is going to work a lot with real estate agents - actually, they are going to be our most essential partners. We are building partnerships with them and we are going to work with them as our main source of properties to buy.
We have created an incentive program for brokers and planning to greatly compensate them for both supplying properties and for bringing interested buyers of shares. If you are a real estate broker, please visit our website and get in touch with us.
Funding and getting in touch.
Flyway has already raised a $1,5 million Pre-Seed round from notable investors and we’re on our way to another $4 million in Seed round, while at the same time we’re raising debt to buy our homes (at very favorable terms). For more information about Flyway, visit our website (soon to be redesigned) and follow us on Twitter, Instagram, Facebook, and LinkedIn for job opportunities that are coming and will be too many.
I hope you join us in this amazing opportunity, either as buyers of one of our first amazing homes in dream destinations or as employees and partners.