Profitable investment in real estate needs proportionate capital. And to earn a proportionate capital one needs a profitable investment. This is the paradox where most real estate industry players are stuck until the concept of fractional ownership—a newer way to invest in high-yielding Residential real-estate came in knocking on the door. It is compared favorably with the other forms of investments like corporate bonds, fixed deposits, and gold, and yet produce a sizable profit and considered safe.
The concept of fractional ownership has been evolving for about the last couple of decades worldwide. This evolution in the mode of ownership has occurred by democratizing fractional ownership by opening the gates for small investments.
In India, fractional ownership is already a $5 billion beast and is bulking further with each day. It is an established market and anyone with solid mettle in the real estate industry knows the importance of it. First, one needs to identify high-yielding properties based on industry-specific criteria. This includes rigorously performing due diligence about the property and researching about its performance, tenant, cash-flows, and market scenarios.
It is important to invest in a valuable property and partially own it via a trusting platform. One should ideally invest in multiple properties to diversify their ownership, which further drops down one's risk of investment. One can earn either through monthly rentals from the property or by reselling it with a profitable margin. The rest of the journey is tracking and scaling your investment by consistently looking out for better opportunities.
With the digitization of the real estate industry, it has become easier to identify, buy, track, and scale investments through several available online platforms such as BRIKitt.COM These platforms allow investors to buy fractions of Grade ‘A’ properties.
Fractional properties like Studio apartments, Holiday Homes , Luxury Villas represent lucrative investment opportunities only if one knows how to access it. Fractional properties offer a plethora of choices since they come in many types and sizes.
In comparison to the residential assets, the rental yields from fractional properties are three times higher. This is because fractional properties are managed and maintained by professionals, which one generally cannot access as an individual. This non-volatile form of investment grants more flexibility to diversify one's portfolio to help the investor in scaling his profits upstream.
Fractional ownership allows flexibility in one's investment choices. At any point during the investment, an investor can receive a return proportionate to the increase in the property's value by selling their shares. And even after selling them, the investor holds the legal title of the property based on his payment history and the corresponding number of fractional payments.
In this new age of investment, fractional ownership brings in a sustainable change. Especially in these difficult times, where the world and hence the market is struggling through a pandemic; the concept could be a medicine.
It can be a medicine to property developers, to drive them to build more quality properties; for mediators, to sell and earn money in more manageable and transparent platforms; and most importantly, it is a medicine for investors, to get into profitable investments without taking all the risk.