Real Estate is an enormous market and holds a lot of importance for investment purposes. However, looking at the current volatility in the market and lesser opportunities for investment, people are looking forward to other options for investing their earnings. These options should ensure staying away from the market diversity and volatility besides providing good ROI (Return of Investment).
Every investment is looked upon for good revenues, so before investing in real estate property, one must ensure good payback and monthly return yields from the property. Currently, the investment market is witnessing a new term of investment – Fractional Real Estate Investment.
Fractional property ownership is a relatively newer term and investors are still dubious about it. However, as new as it may sound, fractional property ownership has allowed retail investors to get access to commercial real estate investment.
According to many Research and predictions, the future of the Indian investment market lies in commercial property ownership and investment. Over the past few years, fractional property investment has gained a tremendous amount of popularity in the financial world.
What is Fractional Property Investment?
To those for whom fractional property is an alien term, here in this article, you will know everything about it and why it is an incredibly beneficial way of investing.
Fractional property investment refers to the type of investment in which a group of investors jointly purchase a property with each individual putting forward his or her funds. The type of property is most likely to be a high-end commercial property. The biggest advantage of fractional real estate investing is that it mitigates the burden over the individual investors besides sharing the rental income of the property in the ratio of investment.
Advantages of Investing in Fractional Property
Fractional investment is a good way to invest in commercial real estate. The concept of fractional real estate investment has been in use across the US and Europe for many years, now gearing up in the Indian subcontinent.
According to Sudarshan Lodha, co-founder of strata property management, “One can check the resale market to invest in fractions from past opportunities. Once the property is fully funded, the investor starts receiving shares of the holding company and starts earning a monthly income. At the same time, the investment appreciates and the best part is the investor can sell his fraction as early as six months after investing”.
Here are some big advantages of investing in Fractional Property ownership-
- Where real estate was considered an investment for the elite class, fractional property investment has ensured that even the middle class gets benefited from it and can invest in commercial properties for rental income.
- By investing in fractional property one can buy the property hassle-free without living with the burden of expenses.
- The fractional real estate investment is usually in the high-end commercial investment properties where there are skyrocketing stakes, which is nearly impossible for a person to have access to the entire asset.
- By investing in Fractional Property, one gets the best of commercial real estate investment– The rental yield, though in the proportion of the investment.
- Because of joint investment opportunities, every individual can enjoy the perks of owning premium commercial real estate, which is otherwise owned by persons with high income.
- The monthly rental yield allows the person to have a long-term source of income which is a book in the current market scenario.
- Fractional property investment is a very lucrative option for retail investors as it allows them to own premium and costly commercial real estate properties.
- The advantage of investing in fractional property is that there is no bound period and one can sell the property as and when required. The investor can take away his share at any point of the time.
- Fractional property investment avails complete transparency as well as the ability to track the acid and its valuation in real-time. Thus, the person can monitor the progress as and when required.
- Fractional property investment does not rely upon the fluctuating stock market conditions and is as good as the old way of investing in the property. Thus, the fractional property doesn’t let the market diversities impact itself.
- Though the entry cost of the fractional property investment is higher, it is stable and a long-term investment option (best if you are looking for a long-term investment opportunity).
Considering the current market scenario and post covid financial market, investors are now relying upon non-volatile sources of income and want to invest in properties with good payback options. Fractional property ownership has led the investors to get their hands full of commercial real estate which is a non-volatile investment with a good monthly income source as well as the flexibility of reselling the property at their disposal.
According to a report by financialexpress.com, Fractional ownership of property in India is expected to grow by 5 billion dollars by the next three years. This is quite huge, so investing in Fractional Real Estate property is certainly worth it.
If you are also planning to invest in commercial real estate property, but the high ticket prices are refraining from doing so, then it is time to grab the best opportunity and invest in owning the premium CRE property through fractional property investment. It is like staying ahead by one step without compromising with your expenses and/or having the burden of big loans.
About the Author: Yield Asset
Yield Assets is one of the best commercial property investment companies that provides the best real estate investment platform. Investing in pre-leased commercial property is one of the best investments that one can rely upon.