According to experts, fractional ownership in real estate is a reliable and smart way for millennials to enter this profitable market. As this concept is new in India, millennials are not aware of this, which is causing them to miss out on several critical developments. As a generation of cautious individuals, millennials have been known to take safer routes of financial planning with minimum risks. Hence, many millennials keep real estate off-limits, fearing recessions and scams. Fractional ownership, when done through the right facilitators, is a safe way to invest in A-grade real estate properties.
In terms of real estate, Fractional ownership is a structure where multiple unrelated investors come together to create a money pool to purchase a property. As the name suggests, in fractional ownership, each investor becomes the owner of a fraction of the property for a fraction of the cost.
Many Indians aspire to own land. Since the cost of real estate is always skyrocketing, working-class individuals cannot afford to invest hefty amounts of money. For an investor base like India, fractional ownership gives access to commercial real estate properties that hold high growth potential. Here are the advantages of investing in a fractional property ownership model.
Commercial properties have always been a big players’ league as they are expensive. Fractional ownership aims at democratizing this industry by allowing regular investors to buy fractions of property within their budget.
By fractionally investing in commercial real estate, one can expect high returns when approached through the right platform, making it one of the best and highest paying investments.
Purchasing real estate can be a lengthy process; the legal work and getting permission from government officials can become a tedious task. With fractional ownership, you don’t have to worry about the legal work or proceedings as the company you are investing in will take care of it all. Hence, making the process faster and smoother.
Don’t put all your eggs in one basket, if you only invest in one asset class, there is less room for growth. What if the asset crashes, and you lose all your money? That is why portfolio diversification is very important. Fractional ownership lets you invest an amount as small as INR 25 lakh in real estate property, giving you a chance to diversify your portfolio and experiment with different assets.
Real estate properties, while very appreciative, are not always liquid. This means, they do not make good emergency funds, and that is one reason why millennials refrain from indulging in this investment class.
Fractional ownership, on the other hand, strives to make this traditionally illiquid asset liquid. Tokenization of property is a method that converts rights to assets into a digital token. So, while you are the owner of a property, when it comes to selling it off, you will not have to worry about the property. Instead, you will just sell your share (token) to an interested buyer. To speed up this process, Assetmonk holds internal sales for any property that was purchased through their platform. This way, you can sell your property without much trouble.
Investing in high-end commercial real estate property helps investors enjoy high returns on a regular interval, making fractional ownership investment a great source of passive income.
On fractions purchased through Assetmonk, you can enjoy annual IRRs of 14-21%, which is much higher than the typical traditional investments.
It is advisable for every earning and non-earning member of society to invest, but millennials need to start investing as soon as possible. Relying on your job for all your expenses as well as a retirement plan, and children’s education can be very difficult and draining.
The recession and falling of stocks have been proof enough of how unreliable the market has become. Hence, having solid financial backing is of utmost importance. Fractional investments in commercial properties can be the best way of asset generation.
It allows investors to invest in stable assets at an affordable price, and generate a passive income. Moreover, if you are new to the modern-day investment option, many investment platforms will be more than happy to guide you through your investments.
Assetmonk, the real estate investment giant, takes great pride in its customer-first policy, by providing guidance and support throughout your investment. Not just that, they perform strict due diligence for any property or company before bringing it to the table, making them reliable and investing through their platform hassle-free.
Visit their website to know more.
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Disclaimer: The information provided on the website is only for informational purposes and is not intended to, constitute legal advice, instead of all information, content, and other available materials.