Does Faction rent out the properties so that I can monetize the time allotted to my share?

When purchasing a second home through Faction, individuals will need to designate their shares for personal usage or for monetization. This designation will apply to the first 12-months of ownership and is binary during that time. As the Faction app evolves, this designation will be less restrictive. For those wanting to generate revenue from their second home purchase, Faction will partner with a third-party to list and manage those bookings.

Can I use my self managed super fund (SMSF) to purchase a property?

Yes, BUT… If you use your SMSF to purchase a property through Faction, then that share is automatically designated for monetization and cannot be utilized by the individual(s) behind the SMSF. This avoids any conflict with the “single purpose” rule of Superfunds. Individuals can still rent the property out on the open market and enjoy it, but they cannot make use of their allotted days personally.

Why are some of the List Prices Approximate?

Most of the Faction properties are outright owned by the company. Others are in the process of being acquired by Faction, and some are being offered up to the Faction community by longtime owners who want to sell yet retain some portion of ownership. Sometimes this means acquiring properties on the open market, which is impossible to predict. Hence the “approximate” notation on the list price of our properties. Given our internal database and extensive research, this is our best estimate. Our team will discuss any questions and communicate any price differences before any commitments are made.

What are the hidden costs?

There aren’t any. Faction works to source the best properties in stunning geographies across Australia (New Zealand, Asia, and the United States coming soon), secures those properties, modernizes and styles them, then brings together a group of co-owners to enjoy their holiday home. The platform charges a small fee on the set purchase price for its services, passing along the styling and modest upgrades at cost. Moving forward, Faction arranges cleaning and all property maintenance, which is passed along to co-owners at cost, and charges a monthly fee of $115 per co-ownership share for managing bookings and the property.

Do I have to interact with or know my Co-Owners?

To date, the biggest hurdle to co-owning a property has been in finding likeminded individuals to join together, and the extreme downside risk to those relationships if things don’t go as planned. Most co-owned holiday homes have traditionally been friends or families banding together and managing it themselves. At Faction, we remove this friction and downside relationship risk by managing the process end-to-end. Booking and property management are all handled privately by Faction, so you can enjoy your holiday home without any drama.

Can I finance the property purchase?

Faction is currently working with a leading financial services firm to offer this service on the most favorable terms to our community, but at the moment this is not available directly through the platform. However, we are collaborating with some of our favourite mortgage brokers to streamline paperwork and to facilitate financing should any members want to pursue that independently or together.

What is the exact legal structure used for Co-Ownership?

Faction structures its co-ownership as a”Tenancy in Common” arrangement, so that all parties receive equitable rights with their share that they can pass along to their family or heirs in the future, or resell as they see fit. As well, this flexible structure allows for Trusts to invest alongside individuals.

Does Faction retain an ownership stake in the property?

No, the platform simplifies the process and structure for co-owning a property for members of its community. If, however, there are any unsold 1/8 shares in a property prior to closing, Faction will buy those shares at the same cost basis as other co-owners, and list those on the platform at a slightly higher rate to account for NSW Stamp Duty inefficiencies.