Understanding Fractional Ownership and How It Is Affecting the Commercial Real Estate World

Understanding Fractional Ownership and How It Is Affecting the Commercial Real Estate World

Fractional Property Ownership may be a new term, but it is not completely new. We all have studied it in maths. Didn’t get it? Focus on the word “FRACTIONAL”. Yeah, ownership can be divided into parts. Now what is Fractional Property Investment and how this freshman is affecting the Commercial Real Estate Market, is what we will discuss in this article. So stay tuned to unveil the most promising investment opportunity for you! And hey, just for knowledge, Commercial Ownership in India is expected to reach $5 Billion in the coming few years.

Being a member of a society where investing in real estate is considered one of the best options, we certainly understand the importance of owning an asset. If you own a land, you have a class and belong to the aristocratic society. Instead of investing in property depreciation, people want to look for commercial property (CRE) with the best rental cash flow. However, CRE requires better communication, a deep understanding of the real estate market, and more money. As a result, only people categorized as High-Network Individuals (HNIs) or super HNIs can be at the top of this investment world. This is exactly why many medium-budgeted investors refrain from owning a high-end commercial property. But not anymore. Due to the introduction of Fractional Property Investment, the new emerging real estate niche has allowed even low and medium-budgeted investors to buy a high-end property and enjoy the monthly rental flow! Fractional Ownership of Commercial Real Estate (CRE) promises long-term capital appreciation, low risk, high return, and reliable investment opportunities. Let us dive deeper into the term.

What is Fractional Ownership?

By the word ownership, we all mean one thing- sole right over a property. Here’s a deal. Fractional Ownership simply means the division of the ownership. Here in this type of ownership, the person owns a fraction of the property and not the whole property. Since the ownership is in a fraction, the cost of purchasing a property is also reduced, thereby helping the newbie investors to satiate their hunger for a commercial property. Besides, the whole story actually lies in the fact that commercial property investment is a fruitful and profitable investment opportunity nowadays (the pandemic has made it even more profitable).

How is Fractional Property Ownership Beneficial Over Complete Ownership?

Assume there is an office space lying at a prime location. The office is spacious with luxury laced with it. But the property costs 10 Cr and you have a budget of only 10 lakh rupees. What are you going to do? Drop the property or consider buying it in a group? Of course, you should consider the latter option which is Fractional Property Ownership where every investor spends equal amounts of money to buy the big property. The rules and regulations are equal for every individual and the rental income is divided among the investors according to their share of investments​. In this way, even a luxury property becomes available for commoners rather than being exclusively available for High Networth Individuals (HNIs). This is certainly a worth considering investment opportunity that shouldn’t​ be missed at any cost if you are looking forward to investing in CRE.

About the Autor: 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.

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